Dear Dr. Don,
I have about $1,500 left over each month after paying all my bills and paying myself by saving. I have credit cards, but they all carry zero interest rate charges. I have a mortgage loan at 4.25 percent with a balance of nearly $100,000. I have been putting the extra $1,500 toward my mortgage. But the zero percent introductory teaser rates on my credit cards will end between May and June of next year. The total of all my credit card balances is around $21,000. I also have a $25,000 home equity line of credit for emergencies. I need a plan to deal with my credit cards. Can you help?

— James Juggles

Dear James,
I’d argue that you shouldn’t use your home equity line of credit to pay off your credit card balances because you’re using it as a substitute for an emergency fund. Sure, you can get cash advances with paid-off credit cards if you are in a jam. If you have seen the interest rates on cash advances, then you’d know that’s a nonstarter.

You may be able to find teaser rates through other credit card providers allowing you to transfer balances. Then, you can try to keep a low interest rate on your balances. That’s a tough thing to do right, though. Bankrate provides advice on how to transfer a credit card balance. Our site can also help you shop for credit cards with low introductory rates.

I propose that you take the $1,500 monthly savings and apply it to your credit card balances. Start with the card with the teaser rate ending in May. Then, move on to the card with the next teaser rate expiring. In the spring, you can decide if you want to tap the home equity line to finish the job and then use the $1,500 to pay down your home equity line. It will take 14 months of $1,500 payments to get out from under $21,000 in credit card debt.

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