Card Problem

Paying off Credit Cards with Home Equity

One effective solution for getting off the credit card rollercoaster if you are currently a houseowner, may be to obtain a house equity loan and use it to pay off your high interest credit card debt. Houseowners often take house equity loans to make house improvements, figuring that the improvements will increase the value of their house and therefore make the loan worth it, but why not take a house equity loan to get rid of high interest debt and make it easier to pay your monthly expenses?

There are a number of gains of credit card refinancing, with the most obvious one being the decrease in interest rates you are paying. The other primary gain is the fact that you aren't incurring more debt when you pay off your credit cards with a house equity loan – you're keeping the amount you owe the same and moving the debt to a more affordable repayment method. If you had previously been struggling to make several individual payments every month, using a house equity loan to pay off your credit cards will result in a consolidation of your debt, making it easier to pay.

Eliminating variable interest rates and getting a fixed interest rate obtain a tax gain with an interest rate tax write-off on house equity loan interest that could not be done with credit card interest consolidate a number of monthly payments into a single, often lower, payment easier record keeping, write and mail one check a month and make one transaction in the check register rather than multiple. Disadvantages of Paying Off Credit Cards with Home Equity Loans

Like everything good in the world, there are also some disadvantages to using a house equity loan to pay off credit cards, that you'll want to consider, though. For example, once you pay off the credit cards, you suddenly have lots of room on them to charge new purchases! This can be extremely tempting, and if you're not disciplined, you could end up charging more debt and making your situation even worse (because now you have the house equity loan PLUS the additional high interest credit card debt!)

It's a good idea to either get rid of the credit cards by cutting them up, or by placing them in a fire safe box in your house so that you aren't tempted to pull them out of your wallet when you're out shopping.

Credit card video from Youtube: Free Ps3 ABSOLUTLEY FREE! NO CREDIT NEEDED!