Do not consolidate credit card debt with a home equity loan/line. It can be tempting --- the rates are usually lower, and the interest may be tax deductible. However, home equity loans are secured debt, while credit card debts are usually unsecured. If you do not pay an unsecured debt - you have a bad credit rating. That is not good, but it is not permanent. If you do not pay back an equity loan - you might find your house being sold on the courthouse steps.
There are three simple ways to eliminate the debt. The first one is obvious; it is to stop using your credit cards. This may seem to be a silly thing to suggest, but the best way to get a handle on your spending is only to spend the cash you have - after you have paid your bills. Second, consider consolidating your credit card debt onto one card - or moving a balance from one card, to one with a lower interest rate.
Interest rates are one of the keys to managing credit card debt. If one has a high balance on a high interest credit card, one is spending a lot of money to "borrow" that money from the credit card company. Additionally, the minimum payment that the credit card company calculates is only based on accrued interest, so if one only pays that, one will never reduce the debt balance.
Credit card debt can help or hurt the credit report. Obviously, one needs to be making at least the minimum payments on time. The second important thing is not to max out your credit cards. One should always have available credit because only then one is sending a more responsible signal to the credit-reporting agency. The best ways to manage credit card debt in terms of your credit score is to either maintain some available credit, or pay your.
The benefits of consolidating the credit card debt are many, with one of the most important being the peace of mind one will have when there is a need to make just one payment in a month, all while getting in control of your credit card debt. If one has good credit, one can also benefit by being able to negotiate a lower interest rate. No matter what, getting in control of debt and spending, although hard to do at first, will eventually offer one a great sense of accomplishment.