People with a lot of credit card debt often look for ways to consolidate that debt to pay it off or lower the interest rates. One way to pay off that debt is through a line of credit.
Line of Credit
A line of credit is the amount a bank or other lender will loan a person without additional approval. A person is given checks to spend against the line of credit at different times. Lines of credit to pay off debt often come in the form of home equity lines of credit.
Risks
Lines of credit will often be approved for more than the amount of credit card debt, so you could be enticed into spending more and going further into debt. A lot of lines of credit also advertise a lower interest rate, but then add on hidden fees causing you to pay more in the long run.
Benefits
A line of credit can consolidate a bunch of credit card debt into one easy payment, often with a lower interest rate.
Reality
Paying off credit cards with a line of credit does not eliminate the debt, it just consolidates it and generally reduces the interest rate.
Alternative
Instead of using a line of credit, you can work with credit companies to settle the debt for a lower rate if you are behind on payments.
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