Should I transfer credit card debt to my Home equity loans? If not? why not?
Tuesday, 18. May 2010
Transferring credit card debt to a Home equity load, is this a good thing?
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Tuesday, 18. May 2010
Transferring credit card debt to a Home equity load, is this a good thing?
Sharing Mind Says:
NO!. what you should do is transfer the balance to a new credit card with 0% INTRO APR. get one with 12 months INTRO period. during thus period you are not accumulating any interest at all as long as you pay the minimum monthly fee on time. transfer again to a new credit card with 0% INTRO period when the current card INTRO period is near the end. when you do this continuously you will pay your debt without accumulating any interest at all and your credit rating will rise because you pay your minimum monthly payment on time. hope that helps.
Blossy Says:
It all depends on the interest rate and does your equity have a yearly fee? I would go with the lower interest. Plus equity is always a tax write off.
_scarlet_begonia Says:
It can be, for two reasons:
1. It’s usually at a lower interest rate.
2. Home equity loan interest is tax deductible (unless you make a lot of money.)
But if you have a no interest or 2% interest offer from your credit card company, I would take advantage of that before you roll the debt into your mortgage/home equity.
And if you DO transfer it, DON’T RUN UP MORE! It’s harder to do than you think….I took out a second mortgage to wipe out my debt (at a fabulous rate) and now have another credit card balance! (Not too big, but still……..not smart either.)
bdancer222 Says:
Bad idea to dump unsecured debt onto your house. So many people do that and end up running all those credit cards right back up. When they can’t keep up with the payments, the house is in jeopardy.
Better idea is to pay off the cards. Concentrate on the highest interest rate card and throw every penny you can squeeze out of your budget at that one, while making minimum payments on the rest. When the highest interest rate card is paid off, move to the next one till they are all paid off.
If you work at it, you can pay them all off within 2 or 3 years.