Should You Use a HELOC to Pay Off Credit Card Debt?

Before tapping into your home equity, understand the risks and explore smarter debt relief options

If you're feeling overwhelmed by high-interest credit card debt, you're not alone. Many Americans are turning to creative debt solutions to lower their payments, consolidate balances, and find some breathing room. One popular option? Using a Home Equity Line of Credit (HELOC).

At first glance, a HELOC seems like a smart move: lower interest rates, one simple payment, and the promise of finally getting ahead. But before you borrow against your home, it’s critical to understand what you're really signing up for—and whether this path aligns with your long-term financial stability.

In this article, we’ll break down how HELOCs work, the pros and cons of using one for credit card debt, and safer alternatives that don’t put your home at risk.

What Is a HELOC and How Does It Work?

A Home Equity Line of Credit (HELOC) allows you to borrow money against the equity you've built in your home—typically up to 85% of its appraised value, minus what you still owe on your mortgage. It’s a revolving line of credit, similar to a credit card, but secured by your house.

HELOCs usually come with:

• Lower interest rates than credit cards
• A draw period (often 5–10 years) where you can borrow money
• A repayment period (10–20 years) after the draw ends

Because HELOCs are secured by your home, lenders offer more favorable terms. But that also means your house is collateral—miss payments, and you risk foreclosure.

Why Some People Use HELOCs for Credit Card Debt

When credit card interest rates climb over 20% (as they have in 2025), the appeal of a HELOC becomes clear. With average HELOC rates around 8%–10%, it might seem like an easy way to cut your interest in half.

Benefits include:

• Lower APRs compared to unsecured credit cards
• One monthly payment instead of several
• A structured payoff timeline during the repayment phase
• Possible tax deductions if used for qualifying home improvements

It’s easy to see why many turn to HELOCs as a debt relief strategy. But there’s a side of the story most lenders don’t emphasize.

The Real Risks of Using a HELOC for Debt Relief

Using your home to pay off unsecured credit card debt is not a light decision—and in many cases, it can lead to deeper financial trouble.

Here’s why:

🏚️ Your Home Is on the Line

If you default on a HELOC, the lender can initiate foreclosure proceedings. You could lose your home trying to pay off past credit card spending.

📈 Interest Rates Can Rise

Most HELOCs have variable interest rates. They may start low but can increase dramatically depending on market conditions. A payment you can afford today might become unaffordable in a few years.

💸 You’re Not Solving the Root Problem

Unless you’ve addressed the cause of your credit card debt (overspending, unexpected emergencies, low income), transferring it to your home equity just buys time, not resolution.

🕰️ Payment Shock During Repayment

Once the draw period ends, your required payments can jump significantly. Many borrowers are caught off guard when interest-only payments turn into fully amortized payments that are 2x or 3x higher.

When a HELOC Might Make Sense

Using a HELOC for debt relief might be a reasonable option if:

• You have a stable, high income and low overall debt
• You’ve developed healthy spending habits
• You’ve budgeted for possible interest rate increases
• You’re committed to aggressively paying down the HELOC
• You understand all the terms and risks involved

Even then, it’s wise to talk to a financial advisor or debt relief professional before committing.

Safer Debt Solutions That Don’t Risk Your Home

If your goal is to get out of credit card debt and gain control of your finances, there are alternative debt solutions that don’t involve risking your home:

1. Debt Consolidation Loan

A fixed-rate personal loan can help you combine multiple credit card balances into one monthly payment—without using your home as collateral.

2. Debt Management Plan (DMP)

Nonprofit credit counseling agencies can work with your creditors to reduce interest rates and create a structured payment plan—often with no loan involved.

3. Balance Transfer Credit Card

If your credit is strong, you may qualify for a 0% APR balance transfer offer. Just be aware of transfer fees and plan to pay off the balance before the promo period ends.

4. Debt Settlement (Caution)

In extreme cases, a debt settlement company may negotiate with your creditors for reduced balances. This can harm your credit and involve fees, so it’s a last resort—not a first step.

The Mitigately Approach to Debt Relief

At Mitigately, we believe debt solutions should be simple, honest, and tailored to real people—not sales pitches.

Our mission is to help you:

• Understand your full debt picture
• Avoid high-risk or predatory lending options
• Explore lower-risk alternatives to HELOCs
• Find a plan that supports your long-term financial well-being

We’re here to cut through the confusion—and help you make decisions that protect your home and your peace of mind.

Conclusion: Your Home Shouldn’t Be Plan A

A HELOC can offer temporary relief—but the potential cost is too high for many households. If you're carrying credit card debt, explore all your options before using your home as a lifeline.

Your house represents stability. Don't risk it for short-term relief when safer, smarter debt solutions exist.