| Guest column: Home equity loans should be used sparingly
The versatility of the home equity line of credit has many consumers tapping into their home's equity to pay for home improvement projects, college tuition, weddings, new vehicles and credit card consolidation. While there are no restrictions on how the proceeds can be used, using your home's equity as a temporary solution to a long-term problem could jeopardize your home and credit. For example, using a home equity line of credit to consolidate credit card debt can put you into further debt if you continue to use your plastic and carry a balance from month to month. Your home is usually your largest asset. If you choose to use your home for additional credit, be sure you have a plan and purpose for that credit, such as financing a home renovation to improve your asset and increase your home's value.
Nitro Debt Could Approach $1 Million
County Commission president wants more information Story by Sara Gavin
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Kanawha County Commission President Kent Carper suspects financial pitfalls plaguing the city of Nitro are worse than city officials are letting on. On Friday, Carper announced concerns that Nitro's total debt may be as high as $1 million. Earlier this week, Nitro officials asked the commission for a loan to help bail them out of their current financial situation. The Commission sent a letter to Nitro officials requesting more information. The two groups are set to meet about the matter Tuesday morning. Copyright 2007 West Virginia Media. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Ask the Biz Brain
I owe $30,000 in credit card debt at a rate of 10 percent and have been offered a home-equity line of credit at 7 percent. Should I use it to pay off the cards? Is there a better way to pay them off? -- MarkThe idea "makes all the mathematical sense in the world," says Ron Garutti, a certified financial planner with Langdon Ford Financial in Clinton. "Not only is the 3 percent savings a great improvement, the 7 percent could be tax deductible," Garutti said. "If the person is in the 28 percent tax bracket and the 7 percent loan is tax deductible, the net effect will be a loan percentage of 5.04 percent. That is an interest savings of essentially half for making the switch. "Sounds like a no-brainer on paper," he said. "But people do not live on paper." The real problem, Garutti said, is that you need to change your spending habits.
Credit score matters, but don't obsess over it
I always cancel credit cards I've stopped using, even if closing the accounts hurts my credit score by raising my debt-to-credit ratio. Why keep unneeded accounts open and risk identity theft? I don't follow the advice to split charges evenly among cards. The idea is to use only a small part of each card's credit limit to boost our credit score. But because the only two cards I use offer rebates, I'd rather pick the one that gives the most cash back for each purchase (one does at grocery stores, for example, and the other at gas stations). Naturally, I always pay my card bills in full. Your e-mails show that many of you carry a balance because you think doing so improves your credit score. It doesn't. Even if it did, I'd rather save on the interest charges. My credit score? The last time I checked two years ago, it was over 800 (760 or higher generally qualifies for the best credit terms).
Delta: No active merger talks with United
Delta Air Lines' management said Wednesday it is open to the "right deal" to take over another carrier after receiving a letter from a New York hedge fund urging the airline to seek a merger with United Airlines -- a combination that would create the largest airline in the world. The company created a committee Wednesday of some of its directors to look at "strategic alternatives" and hired financial and legal advisors. .
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