One of the biggest problems with any scheme to pay off credit cards by using more credit is most people do NOT change their spending habits. The average consumer will take out a home equity loan to pay off outstanding balances and then only 2 or 3 years later find themselves with a home equity loan and credit cards at their max again. That doesn't solve the problem; it makes it worse. Plus there is the potential to lose you home if you fail to make payments on the home equity loan. In my humble opinion, this is not the best solution to your problem unless you and your significant other make some changes in your spending habits. Switching from one low/no interest credit card can be very damaging to your credit score. One of the components of a credit score is how long your current accounts have been open. Longer is better. New credit cards every 6 months will lower your score which means you pay higher rates or cannot qualify for those "teaser" rates. Also, be aware that the teaser rates will escalate very rapidly if you are ever late with a payment. The solution that I suggest to the personal financial management classses I teach is to stop using credit cards for any daily expenses. Save them for emergencies (a death in the family, an earthquake destroys your house, a hurricane is coming and you have to evacuate). Concentrate on paying off one card by paying extra on that card every month but continue to make the minimum payments on every card you have. When that card is paid off, apply that payment to the next card until it is paid off. If you have trouble avoiding temptation with credit cards, put them in a ziplock bag and seal it. Put that bag in another bag and fill it with water. Put both bags in the freezer and leave it there. Anytime you need a card it is available, but you have to wait to thaw it out to use it which means you have time to think about whether or not you really, really NEED what you plan to purchase with credit. While it sounds "dorky" and simplistic, it does work. Good luck

Thanks for all the info! It was a hard step to take out that equity loan because I knew that it is eating up the house. But I really saw no other alternative. I think I will call the CC that are sending me the "interest" bills to make sure I can get them paid off in 1 sweep. [Interest on a $20 balance that is never going to get paid off? That's the problem if I can't get an exact amount on an exact date].I am hoping that by doing this we'll have more $$ to put towards the equity loan and mortgage to pay them down-even if it's only a little bit each time. I do pay all my bills online (i.e. electronically) through their websites. I found out the hard way a few yars ago that to try to set it up from my bank that even though I put in the date I wanted something paid - it wasn't until the company came and "drew" the $$ (that the bank had put a hold on) which made a few bills late-took up to 5 days. So by paying them though the company's site I get a payment date on the date I request. I didn't set up the bi-weekly mortgage though Wells Fargo (even though they were offering it free) becuase I didn't want them "holding" my $$ for 2 wks until the 2nd draw then pay to the mortgage. I now am putting it in a separate bank account and I will electronically pay it each month-with me deciding to add the extra. (And this way if I can't afford extra the $$ is there for my emergencies). [Like the $432 vet bill for one of our dogs this week-unexpected illness yuck!] RA

TT a couple of answers and questions... First, A debit card is not a debt obligation no matter the name stamped on the front so no it does not assist your credit score nor cause a negative effect. Secondly, it's not a major carrier card that is an issue, it's something called "revolving debt" (all credit cards qualify equally as revolving debt). It does not need to be a card with a VISA on it, sears is equally the same in the world of credit, it's revolving debt. So what they're looking at is how you use your revolving debt and how you pay it. You want your total revolving debt to not be a huge number, and you never want to be extended past 50% of your allowable limits (so if you have ten grand in revolving debt available you want to average under 5). So if you have some and it's not over extended and you've paid on time you're ok there. I don't expect you to tell me what the bumps are so I want to give you a few examples of "ok bumps" to see if it helps and a couple of not ok bumps so you can get the lay of the land there as well. So ok bumps are a couple of late pays (30 day maybe 60 but preferably 30 day late). Another would be over limit during that time, but paid down now. Collection accounts that are explainable but are paid now. And not many of those (like two would be tops). OK so it's a business loan...first, I'm having some email problems (someone got my password and has been screwing up my account) so don't email me any answers to these questions or anything (just in case...I don't want anyone's personal info mussed up). So I'm going to ask hypothetical questions as if you were at my desk but I 'm not expecting answers...I just want to make you think before you go in for the loan. OK first pull up your credit info (both of yours) and see what your scores are. If they're in the 700 you're ok...if they're in the 300's you are going to have a great deal of trouble with the business loan. Or as Rickie would say...you got some splain'in to do. How's your equity situation in the house? Would this loan fit in an under 80% scenario (loan to appraised or tax assessed value). A business loan with personal collateral is easier to get than a straight loan especially if you don't borrow much. Please tell me you report all ofyour business income and keep decent financials! I can't tell you how many loans i turned down that probably could have been approved if they actually reported their real earnings. What you say you get verses what you report...well that's between you and the IRS....as a banker I only care about what you report. What's your collateral? If there are assets (aside from personal) that helps, but don't expect a huge LTV on them. Receivables can be taken on a line of credit or loan via UCC if they're formally tracked and under 30 days (unless you do business for a major company who pays slower and you can prove that). What are your receivables? I mean be able to explain who owes you money, who pays you, who's your client, so the banker can make a judgement about your ability to continue working. All business loans are judged to be paid back from cash flow. Does your business cash flow support the repayment on this loan or are you counting on future cash flow from business that will be happening because of this loan. That's an issue...banks own on past history, not so much future history unless it's under contract. Is there a future contract? Bring it with you because it's support for the loan. If you're buying assets, know that the bank wants you in the game too. Many times businesses come in and ask for 100% financing for whatever and the bank's position is that if you're (the business owner) not willing to take a risk on you, why should they? Do you have five years of good financials? Three? IF there are solid profits, consistant earnings, it's easier. If you have huge ups and downs, be sure to be able to explain them. The bank will average the three years or five to determine what your cash flow is really like. And last but not least...know what you do for a living and who your competition is. You'd be amazed how many people used to come and and say "I"m gonna be a XXX" and I'd ask why they were going to be so much better of an XXX than the other 40 XXX's in town. Sell your business to the bank...why is your X so hot? Is it the oldest X, the best client service? What and what keeps you in business in this economy? I hope that helps some? The type of credit you're applying for makes a difference as well. A line of credit is harder to get than a term loan. Collateral counts, and what's the biggest thing....who the heck are you dealing with at the bank? Don't go in and ask a freaking teller for a business loan app. Wait and speak with a business banker (make an appt) don't deal with the 24 year old hottie in new york too hot for her job...oh wait another subject, but actually the same, skip the brainless front desk and ask for a business banker! I approved more loans that had been turned down by branch staff than you can imagine in my career, just because they didn't know what to ask, so when the package when it, they didn't know how to sell it to credit.

Everything I've seen/heard about this is not to cancel credit cards. Cancelling them does affect your credit scores. That said, at one point I had 3 separate credit cards issued by the same bank. I use only one and pay the balance in full every month. I have received letters from the bank requesting that I either use the cards or said cards would be cancelled effective 30 days of the receipt of said letter. I didn't use them, and those accounts have been cancelled. DH hates credit cards and prefers to pay cash for purchases. I did check with the 3 credit bureaus regarding whether the cancellation by the bank for lack of use of those two cards would affect our credit scores. All three claimed that it would not, and I did manage to obtain fax confirmation of that assurance. I did pull reports at 90 days after their cancellation, and our scores hadn't changed. Unless the card company contacts you about cancelling for lack of use, I wouldn't cancel.