Is It OK To Use Personal Line Of Credit To Pay Credit Card Debt?

July 18th, 2017 | by admin
Is It OK To Use Personal Line Of Credit To Pay Credit Card Debt?

Anyone who has a personal line of credit will tell you how advantageous it is whenever you need money. The accessibility, flexibility, and convenience are factors you don’t normally see in regular loans. Moreover, you have the option to use if for a variety of reasons, which begs the question, can you use this in dealing with debt? For example, can you use debt to pay off your credit card bills?

How Personal Line of Credit Works

Before you answer the question, understand how personal line of credit works. This is an unsecured loan that is available in an ongoing basis. Your lender, which is usually a bank, offers you a credit limit, which can be as much as $100,000 or even more. You can withdraw from the funds and use them for many things. But since it’s still a debt, you need to pay it, which can be weekly or within six months. It depends on the agreed payment terms. Your repayment will serve as your adding back to the limit.

Many people like a personal line of credit since they can withdraw anytime they need money. It gives the more control on the amount, mode of payment, payment terms, and purpose. It also spares them the hassle of getting a new loan each time, which takes a few days to approve.

Can You Use It in Dealing with debt?

If you can use the money for a lot of reasons, can you use it to settle your credit card debt? The answer is yes, and a lot of people do that. It’s something you should explore too. With it, you can:

· Take advantage of a lower interest rate – Credit cards are notorious for their high interest rate. Worse, the more you pay only the minimum, the higher your interest goes up. This is the reason why you can trap yourself in a vicious debt cycle. Although personal line of credit also charges an interest, it is still usually significantly lower than that of the credit card.

· Speed up the repayments – The only way you can avoid paying interest if you can hasten paying your balance. You can borrow the full amount of your credit card balance against the personal line of credit.

· Avoid increasing your dues – Credit cards can charge you with late fees every time you miss making a repayment. In turn, you’re increasing your expense. Use personal line of credit to prevent that from happening.

Take Precautions

Just because you can take up a loan anytime doesn’t mean you should use it all the time. In fact, consider it when you have no other option. You don’t have an emergency fund or other sources of income to pay off your credit card debt. After all, a personal line of credit is still a debt. Further, you cannot claim your interest expense from it as a deduction to your taxes.

In the end, you need to learn how to be responsible with your finances, especially in dealing with debt. Personal lines of credit are just tools to help you achieve that goal.

When dealing with debt, you cannot afford to make a wrong move or you’ll end up swamped with payables you cannot manage. Learn more how to do it properly at

Leave a Reply

Your email address will not be published. Required fields are marked *