@Anonymous wrote:
Hello All, I have a $25,000.00 worth of credit card debt which I pay $1300.00 towards a month, the highest apr is 24% . Should I take out a line of credit against my home to pay them off ?? thanks
You have to be really (
really, really, really, really) honest with yourself and self-disciplined before going this route. How did you wind up with $25K in CC debt? If it were magically erased today, why wouldn't it be right back up there in a year's time?
I'm not trying to be ugly here. A HELOC (or a personal loan) can be a wonderful way to kill off your revolving debt and start you on a new path. But you must address the habits and issues that got you where you are now. Maybe you had a one-time disaster with an uninsured car getting totaled, or uninsured medical expenses. But if this is the cumulation of random consumer spending, you have to acknowledge this, and find a new way of handling your money and your credit.
One thing to think about with a HELOC is that this is your HOUSE, your HOME, that you're putting on the line. If you lose your job, if another disaster comes along, if your card balances go back up, are you willing to lose your home over this? Where will you live instead? What will happen to all the work and money that you put into your house? One alternative is a personal loan, as mentioned above. The interest would be higher, but at least it wouldn't be tied to your home.
Loans are GREAT for paying off revolving debt, as long as you're willing to slash your CC expenditures and only use your cards for daily expenses that you would otherwise pay with cash. Take all your cards out of your wallet, and only use one each month, and only for expenses that you're stuck with anyway, like groceries and gas. No shopping, no vacations, nothing. Pay the card off each week or twice a week, as if it were a debit card, and then swap it out the next month for a different card. This will put you in charge of your credit, instead of the other way around, plus it will help keep your cards alive.
It is absolutely possible to recover from heavy CC debt, but it requires absolute honesty with yourself and the willingness to toe the line, and to change your ways, to genuinely turn things around. Hope it works out for you!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007