While taking out a home equity loan to pay off credit card balances can seem like an attractive strategy for getting out of credit card debt, it only works if you never start charging on the credit cards again. Unfortunately, many people fall into the trap of paying off the cards with a home equity loan, only to run up new balances on the cards shortly thereafter -- and creating an even bigger debt problem.
Fortunately, you can still pay off credit card balances with a set payoff date, if you are willing to do the following:
1. Put away the cards and commit to using cash in the future so the card balances don't go up.
2. Pat the minimum balance on all cards to keep them current.
3. Pay as much extra as you can afford each month on the card with the highest interest rate (or the card with the smallest balance).
4. When that card balance is paid in full, ADD this monthly payment to the minimum payment for the next card in the list (next highest interest rate or smallest balance).
5. Keep rolling up the monthly payments to the next card in the list as you pay off each card.
To see how many months it would take to pay off your credit card balances using this strategy, use this free calculator from BankRate.com: http://www.bankrate.com/calculators/managing-debt/debt-pay-down-calculator.aspx
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