By Debbie Wilson Loan Columnist Email a Friend Printer Friendly If you have high-interest credit card debt, it makes good financial sense to consolidate using your home equity.
And as you accumulate larger and larger balances, paying off that debt becomes less and less likely.
What happens instead is that you merely cover the minimum payment while finance charges continue to pile on.
With home equity, you're paying a lower interest rate, increasing your chances of consolidating debt and improving your financial situation. The interest rate on your mortgage, however, is often tax deductible (check with a financial planner or tax professional) and that can be a good thing, especially when you're trying to consolidate debt.
Credit card interest is typically non-tax-deductible. Consolidating your debt allows you to make one monthly payment rather than multiple payments to multiple credit card companies.
With consolidated debt and lower interest payments, you could be paying a great deal less overall.
So look into consolidating your debt and see if it's a good option for you.Once your high-interest debt is paid off, be very careful not to run up the balances on your cards again.With increased cash flow you can save, invest, or keep working on debt consolidation.Financial health takes discipline and smarts--and it's absolutely worth the effort. You can use your home's equity to consolidate debt starting with a home equity loan.A home equity loan is basically a second mortgage on your home taken out with using your home as collateral.