4: Roll over debt with caution

Taking out a loan using your house as security to pay off your credit card debts can be a smart move for some people. The loan may have a lower interest rate compared to the several credit cards you have so you could save a lot of money. But it is important that you consider all the possible downsides that come with this option.

First of all, when you stop making credit card payments, the credit card companies are not going to come and take your home away from you. If you stop paying instalments of a loan that is secured against your house than repossession is a risk. The solution is not paying off your credit card debts with a personal loan and then continue using your credit cards. The solution is addressing the underlying problem which is your spending habits and having far more control over your budget.

The credit card should be your last resort not your first option.

5: Change your thinking

At their essence, credit cards are 30-day loans that should be paid back in full. It's a convenience. Not a way of life. Credit cards are not a license to shop. And although more and more people are doing this, you shouldn't put your mortgage payments on your credit card.

This will just compound the trouble that you'll have down the road.

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