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Credit card with HELOC features vies with second lien loans
['Nazeefa Ahmed Is A Reporting Associate For National Mortgage News Through The Dow Jones News Fund. Awards', 'Nazeefa Was Formerly A South Asian...', 'Originations Editor', 'Capital Markets Editor', 'Technology Reporter']
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Fintech GoodLeap launched the GoodLeap Home Visa Signature Card, a home equity line of credit that pays 6% cash back on home improvement projects initiated through the company's app.
This is a reward rate the company says is the highest available for home improvement spending from any major card.
"A homeowner who just spent $20,000 upgrading their HVAC system shouldn't be earning a few airline miles on a credit card with an average APR north of 20%.
However, many also use their own savings or a credit card to finance their project.
However, excessive tapping of home equity, which many compared to someone using their house as a credit card, has been cited as a cause for the Great Financial Crisis.