Nearly all US credit card holders have a credit card debt. And sometimes this debt becomes a bad headache for credit consumers. All those interest rates, fees, due dates make it really difficult to pay off your outstanding balance in full. Getting a balance transfer card with favorable terms and 0% intro APR rate is a good way to eliminate your debt faster and easier. That is the most widespread financial experts’ advice when it comes to paying off your credit card debt.

But the thing is that all balance transfer cards with good terms are available for customers with good or excellent credit. And what if your credit rating is not high enough to qualify for a balance transfer card? Are there any alternatives for fair or bad credit owners to handle their debts? There definitely is.
If you own a house you are eligible to apply for a home equity loan. But you will not have to spend the money you borrowed on home improvement. You can use this money to pay off your credit card debts. It is possible and legal.

Let me explain to you why you would want to take another loan when you are drowning in debts and how it can help you. You see, home equity loan is issued at a lower interest rate than credit cards’ APRs. Having taken a home equity loan you will pay it off at a rate of about 7-8%. You will barely find even a low rate card with most favorable terms with 7% APR.
So, here is what you can do with your home equity loan. As soon as you have the money on hand, allocate the funds and pay off as much credit card debt as possible. If you want to pay down several credit card balances and you realize that your home equity loan will not cover your total debt, think what plastics you should better pay off in the first place. It is better to get rid of debt on cards with highest APR first.

Even if you do not manage to eliminate your overall credit card debt, you can pay off some part of the money borrowed. This way you will reduce not just the actual amount of money you owe, you will also cut down your interest.

Besides, with home equity loan you can easily keep your records, get variable interest rate and tax benefits.

However, there is a fly in every ointment. Say, you got a home equity loan, spend it on a part of your credit card debts. And what’s then? You need to keep on living, paying new bills, buying food, clothes, etc. But you have no money left from your loan and still have your credit card balances to pay off. If you keep actively using your plastics, even if they are reward credit cards, you are most likely to accrue even a larger debt.

So, once you decide to do away with your credit card debs though taking a home equity loan, hold back your credit card spending. Then you will get maximum benefit from this debt elimination trick. After you are through with your plastic balances, you have just your loan to pay off at a more than reasonable interest rate.

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4 Responses to “How to Do Away with Credit Card Debts without a Balance Transfer Card”

  1. DanJohnson said:

    It’s really a good decision for people with limited credit! I used to take payday loans, they they are less beneficial than home equity loans.

  2. evvy said:

    Most home equity loans require good to excellent credit history. So they cannot be considered as a way out for every consumer.

  3. Steve Jason said:

    The main pitfall of a home equity loan is that you can lose your home if you fail to meet the payment schedule required by the loan.

  4. N_Dorothy said:

    What about a pay day loan? I think it’s easier to get

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