Home Refinance for Paying Off Credit Cards

Debt has long been a problem with the American consumers and even everyone in the world. According to the Federal Reserve, one of the largest source of debt in US consumers is credit card debt. Are you one of those who is facing a hard time in paying off their credit card debt? If you’re a homeowner, refinancing your mortgage can be a smart move to solve that problem. It can consolidate your debt and lower your monthly bills as well.

Why is it a good idea to refinance for paying off your credit card? It’s simply because of interest rates on mortgages have been in the single digits for some time. Yes, there will still be interest. But the refinancing rate beats what you would be paying on your credit card balance. Credit card interest rates keep on climbing and hitting a percentage around 15.96%. So borrowing on your home equity can help you reduce how much you’d be paying in the long run.

Another great reason to refinance your mortgage to clear your credit card balance is the possibility of a tax incentive. The paid interest in your home loan can be deductible while the interest you paid on your credit card debt is not.

Refinancing is also a better option if you’re having problems getting approved for a loan, or for a low-interest rate credit card to transfer your balances to.

Depending on what your goal and purpose are, using a refinance to pay off your credit card debt might be a good idea. Evaluate your financial situation, consider all of your options, and see if a refinance is right for you.