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hard cash for. However, if you've already used your equity on paying off your credit cards, you may find that you now need to put the credit card debt back on to pay for life's little and big surprises.

The popular pro that many people believe about home equity loans is the lower interest rate which means a lower monthly payment compared to our credit cards. This is not always true and unfortunately not that many people know this. You can bargain your interest rate with the credit card companies! Oh yes you can! First of all, most of us get credit card offers on an almost daily basis and many of these offer zero or low interest rates, even for a short period of time. You'll never find a zero interest rate on a home equity loan. The credit card companies are competing with each other for your business, you can even go online to search for low interest cards for people with bad credit. More than likely you can transfer your high interest cards to ones with lower rates, and more times than you think the rates will be lower than on a home equity loan for that matter.

Secondly, you can call up your credit card company and speak to a customer care representative (and if this person isn't helping ask to speak to a manager) and as long as your credit score isn't completely in the toilet you can ask for a lower rate. Especially if you've been with the company for at least two years, more than likely they will drop it at least two percentage points. You can tell them you have an offer from a competitor to do a balance transfer but you would really like to stay with their company and you'll be amazed at the results. For example, when I was twenty years old and had barely any credit built up and what I did was mostly bad credit, I called up my credit card company Capital One where my interest rate was 19% and told them I wanted to close my card and that I was moving the balance over to MBNA and the customer care representative told me he would lower my interest rate to 9%. That's a huge difference! On the flip side bargaining for home equity loan rates will get you nowhere fast.

Every person's situation is different and sometimes a home equity loan may just make the most reasonable sense to you in your given situation. But whenever possible unsecured debt should be kept that way so to protect the roof over you and your family. I just hope my boss never reads this and realizes who wrote it!

Learn more about this author, Holli Eve.
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