The Insecure Security: Home Equity As a Means to Consolidate Credit Card Debt
Contributed by Alix Mcmurray
The Insecure Security: Home Equity As a Means to Consolidate Credit Card Debt
Opinions differ among credit counselors and debt management consultants about the best means to consolidate credit card debt. The approach offered by the credit card companies themselves seems to be to hand the struggling credit consumer an enormous butterfly net, to "trap" all the high-interest credit cards, and then to consolidate them all into one debt entity with a schedule of manageable monthly payments. Qualifying for a home equity loan may in some cases be easier than passing muster for a credit management program. And it's easy to see why.
Your Home is Your Haven, and a Treasure Trove in the Effort to Consolidate Credit Card Debt
In raising children or keeping a home, it's common to feel devoted to the cause, and spare no expense or effort in keeping things afloat. Pets can serve as worthy proxies in the case of childless couples.) These responsibilities take on a life of their own, and the impetus to consolidate credit card debt is often a good housekeeping decision. When a consumer wishes to consolidate credit card debt, there are arguably three major roads to travel. One can refinance a home.
One can initiate a balance transfer from existing high-interest credit cards to one or more new low-interest cards. And now some credit card companies have contracts with debt management services, such that one credit card company "hosts" the consolidation of all debts into one. The risk to the refinancing creditor is significantly less if there is collateral in the deal, and a home is probably the most attractive option -- to the creditor.
