How Homeowners Can Use Real Estate to Tackle Credit Card Debt
Written by Danijella Dragas, CEO
The Bear Stearns Investment Banking firm employed Miss Dragas for over 18 years. She worked in their offices in London, São Paulo, Beijing, New York, and Irvine. Her specialty was asset management and capital markets/investment banking during her final four years at Bear Stearns. Miss Dragas was one of the original team members who introduced Bear Stearns mortgages to the banking industry in the residential wholesale market.
Credit card debt has become one of the most expensive forms of consumer debt for many households. With high interest rates and minimum payments that can keep balances lingering for years, homeowners may find themselves asking an important question, “Can I use the equity in my home to get control of my debt?”
The answer can be yes, but it requires careful planning.
Your home is not simply where you live. For many homeowners, it is also their largest financial asset. Over time, mortgage payments and property appreciation can create substantial equity. That equity may provide financial flexibility that other consumers do not have.
However, using your home to pay off credit card debt is not automatically the right solution. The goal should not simply be to move debt from one account to another. The goal should be to create a healthier financial structure while protecting the long-term value of the home.
The current household debt picture: U.S. and global perspectives
Household debt is not a single global story. The amount and composition of debt vary significantly by country, income levels, housing markets, financial systems, and access to consumer credit. For homeowners considering home equity as a financial tool, understanding the broader debt environment provides useful context.
United States: A $18.8 trillion household debt load
As of the second quarter of 2026, U.S. household debt totaled approximately $18.77 trillion, according to the Federal Reserve Bank of New York. Mortgage debt accounted for about $13.12 trillion, while credit card balances stood at $1.26 trillion. Auto loans totaled approximately $1.71 trillion, student debt $1.65 trillion, home equity lines of credit (HELOCs) $459 billion, and other household debt about $568 billion. Total household debt was down slightly from the prior quarter, while credit card and auto loan balances increased.
This breakdown matters because not all household debt carries the same cost or risk. Mortgage debt is generally secured by real estate, while credit card debt is unsecured and can carry substantially higher interest rates. For homeowners, this distinction is central to the question of whether home equity can be used to restructure expensive consumer debt.
How does the U.S. compare with other regions?
For an international comparison, the International Monetary Fund (IMF)'s Global Debt Database provides a consistent measure of household debt as a percentage of gross domestic product (GDP) for many countries. Because regional totals are not always published using identical definitions and dates, the figures below should be viewed as selected-country benchmarks rather than a single regional total.
Europe: In the euro area, household debt was about 50.3% of GDP in the first quarter of 2026, while the household debt-to-income ratio was approximately 81.0%. Individual European economies vary considerably. For example, the IMF's 2024 data put household debt at about 49.9% of GDP in Germany, 43.7% in Spain, 22.9% in Poland, and 88.6% in Norway.
Asia: Household debt levels also differ widely across Asia. In the IMF's 2024 Global Debt Database, household debt was about 61.4% of GDP in China, 40.8% in India, 90.1% in South Korea, and 69.5% in Malaysia. Thailand remains a particularly important example of high household leverage, with household debt at approximately 86.8% of GDP as of September 2025.
South America: Household debt is generally lower relative to GDP in several major South American economies, although consumer-credit pressures can still be significant for individual households. IMF 2024 data show household debt at approximately 36.4% of GDP in Brazil, 44.8% in Chile, and 4.7% in Argentina. These differences reflect very different financial systems, inflation histories, credit markets, and levels of mortgage and consumer borrowing.
What this means for homeowners
The international picture reinforces an important point, debt itself is not necessarily the problem. The more important questions are the type of debt, its interest rate, the household's income and cash flow, and the asset available to support a long-term financial strategy. In the United States, where mortgage debt represents the largest share of household borrowing and credit card balances have reached $1.26 trillion, homeowners with meaningful equity may have an additional option to evaluate.
However, home equity should not be viewed as a universal solution. Moving unsecured credit card debt onto a home-secured loan changes the risk profile because the property becomes collateral. Any consolidation strategy should therefore be evaluated based on total costs, repayment period, remaining equity, future cash flow, and the homeowner's ability to avoid rebuilding credit card balances.
Data note: U.S. figures are from the Federal Reserve Bank of New York's Q2 2026 Household Debt and Credit Report. Euro-area figures are from the European Central Bank's Q1 2026 institutional-sector statistics. Country-level international comparisons use the IMF Global Debt Database, primarily 2024 observations, with Thailand's figure from the IMF's 2025 assessment. Definitions and reporting periods can differ across sources, so the figures are intended for context rather than as perfectly interchangeable regional totals.
Understanding the real cost of credit card debt
Credit cards can be useful financial tools when managed responsibly. The problem begins when balances are carried from month to month at high interest rates.
A homeowner might have $30,000, $50,000, or even more in credit card balances accumulated through everyday expenses, emergencies, business costs, home improvements, or unexpected life events.
At high interest rates, a significant portion of each payment can go toward interest instead of reducing the principal. This creates a frustrating cycle, a high balance leads to high interest, which leads to a large minimum payment, followed by slow principal reduction and continued debt.
For homeowners who have accumulated equity, the house may provide another option worth evaluating.
Turning home equity into a financial tool
Home equity is generally the difference between the current market value of the property and the amount owed on the mortgage and other liens.
For example, imagine a homeowner owns a property worth $700,000 and has a remaining mortgage balance of $400,000. That represents approximately $300,000 in gross equity.
The homeowner may potentially have several ways to access some of that equity, depending on their financial situation, credit profile, income, property type, existing mortgage, and lender requirements.
Potential strategies can include a cash-out refinance, a home equity loan, a home equity line of credit (HELOC), and other specialized lending solutions.
Each option works differently, and the costs, interest rates, repayment structures, and risks need to be carefully evaluated.
The bigger question: Should you move credit card debt to your house?
This is where homeowners need to think beyond the monthly payment. Credit card debt is generally unsecured. Your house is a secured asset.
If you use home equity to pay off credit card balances, you may potentially reduce the interest rate and simplify multiple payments into one. But you are also securing that debt with your property. That distinction is extremely important. A lower monthly payment does not necessarily mean a better financial decision.
The right question is, “Will this strategy improve my overall financial position without putting my home at unnecessary risk?”
Read more from Danijella Dragas
Danijella Dragas, CEO
Born and raised in England, Miss Dragas earned a Bachelor of Science (BS) in Economics, International Trade, and Banking from the University of London. She spent more than 18 years at Bear Stearns, working across London, São Paulo, Beijing, New York, and Irvine, with a focus on asset management, capital markets, and investment banking. With 36 years of experience in residential and commercial lending, she specializes in construction finance, asset repositioning, financial technology (fintech), blockchain, multi-sector business finance, hospitality, clean energy, trade programs, and pre-initial public offering (pre-IPO) ventures.
