Why the Math Can Work
Credit card APRs commonly run 20-25%+, while home equity borrowing sits in the high single digits — consolidating $20,000 in card debt at a lower rate can meaningfully reduce total interest paid and monthly payment.
The Real Risk: Your Home Is Now Collateral
Credit card debt is unsecured — miss payments and your credit suffers, but you don't lose your house. Home equity debt is secured by your home, so missed payments carry a foreclosure risk that didn't exist before.
Before You Consolidate
- Address the spending pattern that created the debt — consolidating without a plan often means running the cards back up.
- Compare the fees and closing costs of a home equity loan/HELOC against the interest savings.
- Consider whether a 0% balance transfer card could solve a smaller balance without touching your home.
Is the Interest Tax-Deductible?
Interest on home equity debt used to pay off credit cards is generally not tax-deductible under current law — deductibility is tied to using the funds to buy, build, or substantially improve the home.
This page is for educational purposes and isn't personalized financial or tax advice. Figures, rates, and program details change frequently — confirm current terms directly with lenders, tax professionals, or the IRS before acting.