It’s officially normal to have a big, fat balance on your line of credit | General financial discussion | Discussion forum

From Rob Carrick in the Globe and Mail -

It’s officially normal to have a big, fat balance on your line of credit

A new report on the use of home equity lines of credit, known as HELOCs, was published this week by the Canada Mortgage and Housing Corp. The Crown corporation suggests that while the use of HELOCs (pronounced hee-locks) has not reached epidemic levels on a national basis, there are signs these borrowing tools have become a financial crutch for many people.

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The biggest problem with HELOCs right now is the way they’re becoming a support for people whose income won’t give them the lifestyle they want. Some HELOC debt is used productively to generate money for investing in assets that have a good chance of generating a return that beats the cost of borrowing. But the high average debt on HELOCs suggests the cliché about them is accurate – some people are using them as if they’re an ATM.

https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-its-officially-normal-to-have-big-fat-balance-on-your-line-of-credit/