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Details about Balance Transfer and HELOC Debt

I have a $20,000 balance on my home equity line of credit through my bank. Can I transfer that balance to a 0% credit card?

I have a $20,000 balance on my home equity line of credit through my bank. Can I transfer that balance to a credit card that is currently offering 0% APR on balance transfers for 12 months?

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The quick answer is that you will need to read the terms and conditions of the account that is offering the 0% for 12 months, but I would imagine that the home-equity line of credit is not the type of debt for which the issuing bank will allow a balance transfer.

That would be one heck of a good deal if it were. Your equity line is secured by your home, so if you pay that off with an unsecured loan at 0% you are extinguishing a lien on your home equity freeing it up for other uses at no cost to you — at least for the 12 months. You could not pass up that offer. There are some factors that may diminish the value of such a deal.

If you have high interest credit card debt to transfer this is still a good deal IF the terms and conditions of the transfer card extend the 12-month, 0% offer to cash advances, purchases as well as balance transfers. Meaning, you could transfer your high interest credit card debt to this zero percent offer... or just take a cash advance (if possible) and use the proceeds to pay off other high interest debt — including the Home Equity Line of Credit (HELOC)!

Also, make sure that you can pay down the advanced or transferred balance, because when that "teaser rate" expires. The interest on your new debt may shoot back up to stratospheric rates because most credit cards carry much higher rates than home loans, since they are unsecured.

You could also look to apply for a refinance of your entire mortgage, to lock in a low rate — ideally a 30-year fixed rate that could give you peace of mind.

Bills.com has partnered with many providers who can help you on this.

Best,

Bill

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