Should you use a HELOC to pay off credit card debt?

Credit card debt adds up quickly. The total amount U.S. consumers owe on their credit cards has reached $1.21 trillion, according to the Federal Reserve Bank of New York.

It can be challenging to pay off credit cards with high APRs, which can often lead to balances that are far more than the original amounts spent. Consolidating may offer relief from high interest and make your debt more manageable. Using a HELOC to pay off credit card debt can be a smart choice because the interest rate on a HELOC is typically much lower than that of credit cards.

How does a HELOC work for debt consolidation?

A HELOC is a line of credit that lets you borrow against the equity you have in your home. Like a credit card, it's a form of revolving credit that allows you to borrow, repay and borrow again without reapplying. Unlike a personal loan or home equity loan where you receive the entire loan amount upfront, a HELOC offers more flexibility in that you're able to withdraw what you need when you need.

A HELOC term consists of two main phases: the draw period and the repayment period:

• During the draw period, which typically lasts 10 years, you borrow money when you choose and are only required to make interest payments toward the withdrawn amount.
• In the repayment period, you can no longer draw on the HELOC, and you pay back the principal and interest on a monthly schedule.

You can use a HELOC to consolidate debt by adding up the balances on your higher-interest debts and withdrawing the total amount from the HELOC to pay off those balances. By doing so, those high-interest balances are streamlined into one monthly HELOC payment — ideally at a lower interest rate than what you were paying on those credit cards.

Benefits of using a HELOC to pay off credit card debt

Consolidating credit card debt using a HELOC offers some major advantages. The benefits include:

• Interest rate savings: The average APR charged on credit card accounts was 22.25% in 2025, according to the Federal Reserve. Rates on HELOCs are usually significantly lower than credit card rates.
• Simplified payment management: Consolidating multiple credit cards with a HELOC gives you one monthly payment that's easier to keep track of.
• Flexible access and repayment options: During the draw period, you have the option to make interest-only payments or payments toward both principal and interest.
• Potential credit score benefits: Opening a HELOC and using it to consolidate credit cards can lower your utilization ratio on revolving credit, which is one of the factors that determine your credit score, according to myFICO. Lessening the number of accounts with amounts owed can also have a positive effect on your credit score.

Additional considerations when using a HELOC to pay off credit debt

A HELOC itself is another form of debt, so keep these key considerations in mind when using this strategy to pay off your credit cards:

• Home as collateral: Credit card debts are unsecured, meaning that your assets are not on the line. If you pay off credit cards with a HELOC, you're replacing unsecured debts with a line of credit that's secured by your home. Missing HELOC payments could result in foreclosure, so lenders aim to only approve borrowers they believe can manage the monthly payments.
• Variable interest rates: Similar to the interest rates of most credit cards, HELOC rates are variable and commonly tied to the prime rate. This means that as the prime rate moves, so do the interest rates of a variable rate HELOC.
• Temptation to accumulate more debt: When you consolidate credit card debts and bring your account balances down to zero, you may be tempted to continue charging purchases to your cards. You could go further into debt if you don't limit spending after opening a HELOC.
• Criteria for HELOC approval: Borrowers must meet certain criteria to get approved for a HELOC. You need at least 15-20% equity in your home, usually a credit score of 680 or above and ideally a debt-to-income ratio less than 50%. Having less than 15% equity, poor credit or a high debt-to-income ratio can be disqualifying.

Ready to pay off your credit card debt with a HELOC?

Consolidating your credit cards with a HELOC could help you save money on interest and take control of your high-interest debt. Compare the pros and cons to see if you could benefit from a HELOC. Curious about your HELOC options? Get a personalized rate quote from Citizens in minutes—no commitment, no credit impact.