Cards Quote by Jean Chatzky
“A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.”
About This Quote
Source Book: Money 101 by Jean Chatzky, 2019
Consolidating debt is worthwhile only when it reduces the total interest you pay, using lower‑rate loans to replace higher‑rate ones.
In simple terms: Debt consolidation works if it lowers overall interest.
Key Takeaway
Seek lower‑rate financing before merging debts.
Themes
personal finance
debt management
interest rates
risk assessment
Mood
cautious
analytical
Type
advisory
practical
When to use this quote
- refinancing a mortgage
- using a HELOC to pay credit cards
- personal loan for student debt
- auto loan consolidation
Key Concepts
APR
cash flow
credit scoring
loan terms
Questions to Reflect On
- Are you comparing total cost over the life of the loan?
- Do you have a plan to avoid new debt after consolidation?
A Different Perspective
If the new loan has fees or a longer term, total cost may rise despite lower rates.
![“Even in the days of the tightest credit in 2008, HELOCs [ home equity line of credit ] and home equity loans were being made.” quote by Jean Chatzky](https://sms4smile.com/quotes/img-quotes/44b/jean-chatzky-15313_credit_even-in-the-days-of-the-tightest-credit_3220736.jpg)
![“You also need to understand that when you consolidate credit card debt into mortgage debt - like a home equity loan or a HELOC [ home equity line of credit ] - you're taking an unsecured debt and turning it into a secured debt.” quote by Jean Chatzky](https://sms4smile.com/quotes/img-quotes/e84/jean-chatzky-15313_cards_you-also-need-to-understand-that-when-yo_1363945.jpg)
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