Is Using the Equity in My Home a Good Way to Consolidate and Pay Off My Credit Card Debt?

Yes and No.

In order to see which answer applies to you, you need to ask yourself a couple of very important questions about your credit card debt. Has your credit card debt situation changed recently? Have you been through a hardship that has made it impossible to continue making the monthly payments on your credit card debt as they stand right now? Has your pay been decreased, or you've been laid off, or been out of work due to an illness, been through a divorce, or had a death in the family. If so, then you can borrow against the equity that you already have in your home to assist in paying off your credit card debt.

If your situation has not changed and you have credit card debt due to poor money management and shopping sprees, it may not be a good idea to attach that credit card debt to your home. What you are doing is taking unsecured Credit Card Debt, turning it into secured debt and putting your home on the line. Once you have paid off your credit card debt you may have the urge to take that handful of credit cards and go shopping thinking that you can easily pay off the lower balances. You must, however, take into consideration that your house payments are going to increase. Now you have a higher house payment plus the new credit card debt to pay. If you are having a hard time paying your credit card debt, "robbing Peter to pay Paul" is not the answer. You could lose your home and still have the credit card debt looming over your head.

If you do have a hardship situation, you should also consider other options such as Credit Counseling, Debt Consolidation or a program that specializes in hardships such as Debt Settlement Programs to help you handle your credit card debt. By choosing one of these alternate Debt Relief options you can preserve the equity you have in your home; your payment on your home stays the same, and you can get your Credit Card Debt paid off in a fraction of the time for a lot less money.