Safer Options Than a Cash Out Refi To Eliminate High-Interest Debt

Economic Challenges - Inflation remains persistent, causing financial strain for many Americans, with the percentage of those making less than the minimum credit card payment rising from 8% to 13% in 2025 [1] - Increasing credit card debt is leading more Americans to utilize cash-out refinances, which constituted 59% of all refinance transactions in Q2 2025, with 70% of these borrowers accepting higher interest rates and facing monthly payment increases of nearly $600 [2] Debt Management Alternatives - Balance transfer credit cards offer a 0% APR for up to 21 months, providing a potential solution for those with good credit to manage debt without risking home equity [4] - However, if the debt is not repaid within the promotional period, interest may be retroactively applied, and transfer fees of 3% to 5% may apply [5] - Home Equity Lines of Credit (HELOC) serve as a safer alternative to cash-out refinances, allowing borrowing as needed at typically variable interest rates, while cash-out refinances replace the original mortgage with a larger one [6][7] - Debt consolidation loans can simplify the management of multiple credit card debts by combining them into a single loan [8]