You risk an appreciating asset. Your home is an appreciating asset because it gains value with time. Credit card purchases are depreciating assets, losing their value quickly. Using appreciating dollars to pay for depreciating goods or services is counterproductive. Your home equity will not be available to use.
People often use the accumulated equity in their homes to help fund their next home purchase.
By tying up the equity in your home you reduce the money available to pay for a new home. You pay more over the long-term. Although debt consolidation loans feature low monthly payments, the loans are extended over an extended period of time, so you end up paying substantially more in interest payments. CCCS urges people to explore all options before choosing a home equity debt consolidation loan. Consumer Credit Counseling Service of the Gulf Coast Area Inc. is a non-profit, community service organization that provides professional financial guidance, counseling and debt management assistance to consumers.