ATM or credit?

i was reading a book today and it caused me to think of the popular phrase “the housing ATM”, used to refer to people refinancing their homes, withdrawing equity, and using it for consumer purchases. it’s not really an ATM, because when you use that card you are not increasing a balance. a debit card decreases the balance of the account, and a credit card increases the balance when you use it. sure, you can view the transaction from the standpoint of either the amount owed on the loan, or the amount of equity built up. when you call it the housing ATM, i guess it rings more like sound money management, even if it may not be.

the book, by the way, was talking about the days when credit card interest was tax deductible, and how the US eliminated this deduction but made up for it with tax-deductible mortgage interest payments, so the shopper with a home could retain a tax-advantaged position.






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