Aven, the credit card backed by your home equity

05.12.2024 - 14:37 / thepointsguy.com

There's a unique credit card that you might not have heard of that could be an interesting way to leverage the equity in your home to reduce your interest rates and earn rewards. The Aven Visa Credit Card is an innovative financial solution that rewards you with a lower cost of capital for having built equity in your home.

This card can be right for homeowners with some borrowing or spending needs. It isn't for everyone, but if used correctly, it can potentially make sense for you.

The Aven Home Credit Card combines a credit card and a home equity line of credit, or HELOC. It uses the equity in your home to give you a flexible credit line for purchases. Not to mention, it comes with low variable interest rates starting at 7.49%.* Plus, the card starts at a $0 fee to get the card*. That includes no origination fee, no annual fee and no appraisal, notary or prepayment penalty fees, though a county recording fee may apply.*

It is a rewards card that earns you 2% unlimited cash back on every transaction you make with the card and 7% cash back on all hotel bookings through the Aven Travel Portal.* Aven states that you'll find all the same hotels and airlines available on other online travel agencies, including Four Seasons, Ritz-Carlton and other luxury chains.

Aven says that it approves new customers quickly with lines up to $250,000 with flexible repayment options. Borrowers can also request cash advances or balance transfers, though a 2.5% fee* on these types of transactions should factor into your decision-making.

It's worth noting that this sort of approach to leveraging the equity in your home does have some risks and drawbacks.

The variable APR and the 2.5% fee on cash out and balance transfers* could impact your total cost of credit. Aven does offer fixed APR plans for cashouts and balance transfers as well with 5-year or 10-year term options.* HELOCs (home equity lines of credit) carry the risk of a lien on your home but lower your interest burden, whereas personal credit cards generally won't result in foreclosure on your home if you're unable to pay your debt but carry much higher interest rates that might result in bankruptcy. Aven is aware of people's potential concerns about foreclosure and recently introduced a guaranteed foreclosure protection program for eligible cardholders.*

Where Aven truly shines over traditional HELOC processes is the ease of applying and the time it takes to approve and open your account. Customers can get approved in as little as 15 minutes.

This card is a home equity line of credit, even if it functions similarly to a credit card. That means you'll need to own a home and have the title in your name. You'll also need a credit score of at least 640, a combined