One strategy for stockpiling cash is to tap a home equity line of credit (HELOC).
Sure, falling housing prices mean fewer of these credit lines are being given, and many borrowers are seeing their home equity credit lines cut back or eliminated.
But those who can still tap their HELOC can use it to build up cash and, in rare cases, make a little money. If your HELOC rate is 5% or lower, consider drawing down that cash and buying a one-year certificate of deposit that's yielding north of 4%, says John Ulzheimer, president of consumer education at Credit.com.
You'll also get a tax deduction, which can help make up for the difference. "If HELOC rates go up, pay down the money and you are off the hook," he adds. The main point is to gain access to cash, with the arbitrage a side benefit.
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