Liz Weston: A retired couple are considering opening a new credit card to pay for the heater. Is this the best option?

Dear Liz: My husband is 68, I’m 70, we’re both retired and on social security. We have little savings. My husband wants to charge $ 10,000 on a low interest credit card to pay for a new furnace and a new water heater. He plans to pay the minimum each month and, at the end of each year, transfer the balance to another low-interest credit card. Is it a good idea?

Responnse: You may have better options.

Many credit cards offer low introductory rates that expire after 12 to 21 months, but you usually won’t know until you apply what your credit limit will be.

You may not get a limit high enough to make all of your purchases, or you may use such a limit that will damage your credit scores. (Scoring formulas are sensitive to the amount of available credit you are using, and ideally you would not be using more than around 10% to 30% of your credit limits at any one time.) When requesting the transfer from your balance to another low-rate card, you run a similar risk.

A home equity line of credit or home equity loan might be a better choice. HELOCs have variable rates, but you would have a source of funds that you can draw down and repay as needed (much like a credit card, but backed by the equity in your home). Home equity loans usually have fixed terms and rates, so you can borrow what you need and pay off the debt over time (often over 15 to 20 years).

If paying off the money was a hardship, a reverse mortgage might be an option. However, reverse mortgages can be complicated and expensive, so talk to a housing advisor approved by the Department of Housing and Urban Development before proceeding with one.

Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions can be directed to him at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at

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