Whether or not this is a wise use of the equity in your home is a matter of much debate.  Critics argue that a consumer should not borrow against their biggest asset to pay off unsecured impulse buys.

In addition, in our current economic climate, home values have plummeted and there may be little or now no equity upon which to draw.

Do Not Transform Unsecured Debts Into  Debts Secured By Your Home

It is not a good idea to turn an unsecured debt into one secured by your personal residence.  Do you really want to pay interest on that date night with you ex-girlfriend for the next thirty (30) years?  Of course not.

Furthermore, credit card debt is legally an unsecured personal debt.

In other words, in most cases, the creditor cannot take your home in response to defaulting on a credit card.

When a consumer takes out a credit card debt consolidation loan using a HELOC, they are turning unsecured debt into debt secured by their home.

This is rarely a good way to simplify family finances.

Consider A Credit Card Balance Transfer

When an unsecured consolidation loan not be available, a credit card transfer is preferable even if it is a short term interest free credit card or low interest balance transfer option.

Do not mortgage your family’s home to pay for a night out on the town.  Home equity lines of credit should be reserved for improvements to the home or for other emergencies, not to consolidate credit card debt.

In my opinion, any credit card debt should be considered excessive.  But that’s just me.

Getting out of credit card debt can seem like a daunting task, but like anything else you have to do it one step at a time.  Your first step has to be to stop using your cards and making more credit card debt.  Seriously, just stop using them.  Your monthly payments are going to be a heck of a lot easier to make if you aren’t increasing the amount you owe.  Second, you have to determine how much you owe in total.  This will help you determine whether or not you will be able to tack your debt on your own or use the services of a credit card debt consolidation company.