Using a HELOC to Eliminate Credit Card Debt

[Shafi Noss]

Hi everyone, I am studying for my license, and having trouble with one of the scenarios. It looks like this:

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Julie wants to pay off her $5,000 credit card balance now, before she closes on her new home. She takes some of the money she set aside for a down payment and closing costs and uses that to pay off the credit card.

Helpful or Harmful?

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The course lists the answer as harmful, but doesn't explain why.

It seems to me that this is a good thing because her debt is reduced, she'll just have to wait a little longer to save up for her down payment again. Maybe the con is she has to pay rent longer instead of buying her own home immediately, but I'm not sure.

What do you guys think about this?