Be careful attempting to reduce your credit card debt

Tuesday, January 20th 2004, 12:00 am
By: News On 6

The post holiday bills are arriving, proof of just how much you spent. There are online opportunities to get the credit cards paid off, but these sites can offer more headaches than help.

News on 6 consumer reporter Rick Wells tells how to keep from going deeper in debt. Consumer: "Now I'm really struggling with how I'm gonna pay for this."

How many of us have said that as the holiday spending hangover has hit. Credit card debt for all of us totals $735-billion; the number is likely to go up. A national survey says only about half the people who made a holiday spending budget actually stuck to it.

We're up to our necks in debt. Bob Walters with Quicken Loans: “With on line home equity tools it's now very easy to turn the equity in your home into cash." In fact with a click of the mouse you can apply for a loan, borrow against the equity in your home the difference between what it's worth and what you owe, get an answer in about ten minutes and the money in as little as ten days.

Tom Simpson with the Consumer Credit Counseling Center: "People are getting phone calls people are getting solicited by mail all the time, put your house up, put your house up." Simpson says if used properly this can be a lifesaver, unload those 18% to 24% credit cards in favor of a 4% or 5% loan and that interest is often tax deductible, but. Simpson: "You could lose your home, and not change the spending habits that got you there is the first place."

These home equity loans can also be used to finance home improvements, and the interest rates are very attractive. Simpson: "Some of these are going to offer a higher interest rate than others."

So he says comparison shop, be aware of the drawbacks, but if used properly home equity loans can help, you unload lots of high interest debt.

Consumer Credit Counseling Center of Oklahoma is a United Way agency, which offers counseling and classes on managing debt. There is a class Wednesday night on taking control of your money.