We’ve noticed several articles about low-rate balance transfer checks lately and, if our mailbox is any indication, there is a definite “post-holiday” push by credit card companies to encourage transfers. Discussion usually centers around whether it makes sense to use these checks to pay off higher rate credit card balances.

But don’t forget interest rates on HELOC loans have steadily risen in step with the Fed’s aggressive interest rate policies over the last year. It may make sense to pay down the HELOC balance with one of the 1.99% or 2.99% “for the life of the loan” balance transfer check offers we’ve seen recently. If you consider this strategy be aware of the following:

1. The minimum monthly payment will may be higher than the amount you’re required to pay on the HELOC. This is because credit card companies have been moving minimum requirements upwards.

2. HELOC interest is (generally) tax-deductible while credit card interest is not. Thus, while your apparent HELOC rate maybe 7%, the effective after-tax rate (assuming 30% fed/state tax bracket) may only be seventy percent of this - or under 5%.

3. Take into account the “balance transfer fee” you may be assessed. Typically these are 2% - 3% of the balance transfer amount with a $50 or $75 maximum.

4. Take care not to utilize more than 50% of the proffered credit card limit - on a $15,000 card, use only $7,500. High utilization ratios can negatively impact your FICO score which can have costly consequences in places you might not be aware of - such as auto insurance.

5. Don’t use the card for any purchases or cash advances! The trap being set by the card companies is to lure you with a low balance transfer and then hope that you’ll use the card for additional purchases. But each “new purchase” takes a backseat to the 1.99% balance and while accruing interest at a 15% rate - or more!. You not able to pay off this high rate balance until the teaser rate balance is paid off first.

6. Finally, don’t be late or otherwise default on any payments…doing so may give the card company the right to immediately increase the rate on your balance. If you do slip up, minimize the impact by immediately paying off the balance with a check from your HELOC. This will put you back at the point you started.