The HELOC Dilemma: When Your Home Becomes Your Bank
Let's cut to the chase, founders. Between 30 to 50 percent of homeowners who use a HELOC to consolidate credit card debt end up right back where they started, often with an even bigger problem. That's a brutal statistic for any financial strategy. So, can a Home Equity Line of Credit (HELOC) be your escape route from high-interest unsecured debt, like those pesky credit card balances? The short answer is yes, absolutely. But, and this is a big "but," it comes with significant caveats.
Think of it this way: a HELOC offers a variable interest rate, it's secured by your primary residence, and if you don't play it smart, you're swapping one problem for a potentially catastrophic one. As of May 2026, typical HELOC rates for borrowers with a FICO score of 720 or higher hover around prime plus 0.5 to 2.0 percent, landing in the 8 to 10 percent range, with the prime rate at approximately 7.5 percent. Compare that to the average credit card APRs, which typically range from 22 to 28 percent. This substantial rate difference, a spread of 12 to 20 percentage points, translates into real money. On a $25,000 balance, you could see annual interest savings ranging from $3,500 to $5,20
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