Home-equity loan that you would use to pay off the credit card debt, which carries an annual interest rate of around 20 percent, with tax-deductible home-equity debt at close to the prime rate, recently 8.25 percent. That can be a sound money-management practice, but with one big drawback: You're putting your home at risk to pay off what had been unsecured credit card debt. If you fall behind on the home-equity loan, you could lose your home to foreclosure. Credit counselors sometimes will recommend the strategy, but they warn that it's dangerous unless the consumer has revamped the household budget to bring down spending and forswears running up the credit card balances again.
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Equity Loan
credit card debt
Big Drawback
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