Consumer Debt is one of this Nation's biggest economical concerns. The amount of consumer debt has increased 14% since last year. The scary thing about credit card debt is that it carries a very high interest rate, compounds daily and can feel like drowning slowly in quick sand. Over the past few years, low minimum payback rates of between 2% and 2.5% have encouraged Americans to spend, spend, spend -- and to rack up an average credit card debt of close to $10,000 per household. For the estimated 40% of cardholders who carry a balance from month to month, the low minimums free up cash. But paying off a big charge little by ever-so-little also means that a $1,000 debt can turn into a 22-year commitment -- and that you'll accumulate thousands more in interest in the meantime.

People are now in a revolving debt cycle that they'll never escape," says Adam Brauer, a debtor advocate and in-house counsel for Debt Settlement USA in Scottsdale, Ariz. "So the government nudged credit card companies into saying, 'This isn't working.'"

What is working is homeowners have realized what a hidden treasure home equity has become. The past 5 yrs have brought increased wealth to home owners across the United States. Extremely low interest rates and easier underwriting guidlelines have now made it possible for home owners to free themselves of this ever increasing enemy of credit card debt. By using your home's equity and paying off these high-rate credit cards you can instantly lessen the monthly burden you feel just trying to keep up with your minimum payments and pay off your debts years faster. In many cases the debts you consolidate into your new cash-out loan will become tax deductible interest at the end of the year.*

There are two ways a home owner can pay off or consolidate debt. You can do this by adding money to your current mortgage thus increasing the balance by the amount of debt you are paying off, or you can choose not to touch your current first mortgage balance and choose to do a new second mortgage or home equity line of credit instead. Please visit our refinance page for details.

*consult your tax advisor, LowVARates is not qualified to give tax advise