Averting Financial HEL

As with so many other things in life, financial moves that sound good can turn out to be anything but.

And on The Early Show Tuesday, financial author and radio host Dave Ramsey raised caution flags about three such options.

He gets plenty of snail-mailed and e-mailed questions about money, and the three Ramsey answered Tuesday all involved options he says people should skip.

Home Equity Loans

"I'm always going to take people away from debt," Ramsey told co-anchor Julie Chen. "The 'HEL,' the home equity loan, sometimes it just means they left off the 'L.' These things are bad news. A lot of home equity loans have calls, or balloons in them, so you have to re-qualify, so if you have a car wreck, or lose your job, you could be up the creek. You could really be in a mess. Most of them have variable rates and most have high interest rates. They're really a poorly designed product and a lot of people are taking them out to pay off debts and things like that. It's a bad plan. Stay away from them.

"(If you already have one), get it paid off as fast as you can.

"If you need a long-term loan, take out a good quality mortgage, where you get that (rate) locked in for 15 years with the great interest rates we still have, and you're not all over the map, at the bank's whim, on the interest rates."Co-Signing

"You know, when I do something stupid with money, I call it 'stupid tax.' This one qualifies! You should never cosign a loan for anyone. The banking industry is very aggressive at loaning money to people. And if they in their aggression won't loan you money then you don't need to be borrowing money! So, please don't cosign someone they won't loan money to. You're just asking for it. You're playing Russian roulette with your wallet. Do not do this stuff. Never, never, ever (cosign). If it's your child, teach them to save up and pay cash."

Timeshares

"It's one of the few products in America that has like a 98 percent dissatisfaction! You only meet about one person in 100 who actually likes owning a time share, and it's one of the few places you still have the super-high pressure salespeople. They give the old stereotype of the used car salesmen a run for its money. They put you in a room, don't let you out, get the bright lights. It's tough selling. … Some people buy because they're intimidated into it. The big problem with them is, the money you spend, you can go on vacation anywhere, anytime, and it's a consumable, meaning you have to -- the 15 or 16 or $20,000 you spend, you have you to use it up because there is no market for them. You can't give the stupid things away once you buy them. Nobody wants to buy them and there are lists and lists and lists on the Internet. Man, once you get in one, you're stuck. So please just spend your vacation money on a wonderful vacation and don't get caught up in this hype."

"It's not like you're saving money if you do this time share, right?" Chen asked. "They're expensive."

"They're expensive," Ramsey agreed. "Not only do you have the annual maintenance fees, which tend to go up, but on top of that, you can't get rid of them, so the money you drop in, you've consumed it. … I say, go on vacation and enjoy yourself; stay away from the headache."