Quote:
Originally Posted by TorqueDog
I've seen far too many people let their home-secured LOC get away from them then have to bust their asses to fix the mess, my parents being a good example. It's too easy to think "ah, the interest is nice and low, put it on the LOC" and before you know it, you're never getting out from under that thing.
I see the high interest rates of credit cards as a deterrent from racking them up. A high interest rate is punitive so it encourages me to a) not spend beyond my means, b) make smarter purchasing decisions, and c) prioritize paying credit cards off faster if I do need to carry a balance.
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For disciplined homeowners, a HELOC can actually be an extremely effective strategy to pay down your mortgage quicker. It can certainly be abused, but it is a double edged sword.