To use your home equity to pay off your credit card debt (or any other debt) is not a wise thing to do. If you are considering consolidating all your debt and moving it into an equity loan, you will loose a good opportunity to pay your total debt off much faster and pay less interest. If you do consolidate your debts in this way, it may eliminate your best opportunity.

This article is for the purpose of explaining what the better opportunities are. And even if you have already consolidated your loans, all is not lost. But the first thing you need to do is to regain some equity in your home. However, even if you have already consolidated your loans in this manner, and there is enough equity remaining in your home, you are still in good shape.

With high credit card interest, or if your car payment seems like a big burden, it is tempting to use the equity in your home, which may have a much lower interest rate, to do what appears to be eliminating your debt. But it is not!

The equity in your home is a good tool for eliminating your debt. But the trick is: Do not combine it with your mortgage payment. You need to use the equity in your home to pay down, on a monthly basis, the principles on your larger interest loans first. Then you can target your mortgage loan in this same manner. But you need the equity in your home to do this.

The banks have an interesting quark. If you take out an equity loan and then pay it off at the end of every month, you never have to pay the interest. In the meantime, you can use that money during the month to pay down the principle portion of your mortgage. That is the portion that is generating your interest.

The principle is similar to a person paying off their credit card each month and thus avoiding the interest.

The basic idea that I am advocating is for you to use the resources the bank provides to do exactly what they do, and that is to make their money work for them. So use the tools they provide to increase your financial situation.

Do you want to learn the best way to escape paying interest? You can get my free ebook, How to Significantly Lower the Interest on All Your Loans, Including Your Mortgage, and That Without Refinancing.

To get the free ebook, click here: Lower Interest On All Loans.

Alfred Spengly currently works with a company that has been registered with the better business bureau since 2006 with zero complaints. It is a company that strives for its customer's satisfaction, helping individuals and families manage their own money by providing the tools they need to establish their own financial security.

Personally, Alfred has worked in the financial field for almost 15 years.