Many people
rack up a lot of credit card debt and turn to home equity to
ease the burden by using their equity to consolidate debt. Doing
this can reduce monthly interest charges, because credit card
interest rates often are more than 10 percentage points higher
than rates on home equity loans and credit lines.
There's
a dark side to using equity to consolidate other debts.You might
be tempted to run up the credit card balances again, leaving
you with big debt and no equity. It might be best to cut up all
but one or two cards, stop carrying them with you, and use cash
more often.
