Prime Rate Credit

This is an interesting spin on credit card debt. Some people are taking their high interest debt, in the form of high interest mortgages or ARM’s, which are Adjustable Rate Mortgages, which tend to be adjusted to the detriment of the home owner when the financing interest rates are going up in general.

Some people are taking their home equity loans and transferring them to low APR credit cards or special credit balance transfer card offers so they can both save money on their interest rate (if that’s the case, it’s not always the case for every mortgage loan necessarily).

This type of practice may become more common as the prime rate for mortgages shifts and banks and mortgage lenders are forced to increase the rates, especially on adjustable rate mortgages. Heck, if you have an offer for a low apr balance transfer credit card, and you’re looking at a low apr versus paying thousands of dollars in interest, then I can’t blame you for picking the card over the equity loan!