Would it be wise to apply for a home equity line of credit on a veriable rate to payoff some cc debts ?

Question

Would it be wise to apply for a home equity line of credit on a veriable rate to payoff some cc debts ?

Answer 1

Typically yes.

Most people don't get into trouble by using a Heloc (Home equity line of credit) to pay off their credit cards.  Most people get in trouble because they run the credit cards up again.  

Sorry, but you can't borrow your way out of debt.

Answer 2

No do a home equity loan at a Fixed rate to pay off cards. I did that. Make sure it is fixed rate not a rate that can change like variable. I got a new roof and porch and paid off cards at a fixed rate for 6.75 for 5 years 20,000.

Answer 3

If you have good credit (i.e. a score of 640 and above), it may prove beneficial.  HELOC rates are generally lower then credit card rates.  Also, the interest on the HELOC is tax deductible if you already itemize your deductions (which most homeowners do).  The IRS doesn't permit citizens to deduct interest paid on credit cards.  Having said this, you may want to make sure that you still have equity in your house given the current state of the real-estate market.

Once your credit cards are paid off, you should cut them up and throw them away.  Avoid carrying credit card debt at all costs.  As far as I'm concerned, there are only three things that are worth borrowing for:

(1) College education

(2) House (only if you can afford the monthly payments - part of which should be contributed to the principle)

(3) Car