(MONEY Magazine) – YOU MIGHT THINK THE TAX DEDUCTIBILITY of credit-card interest had vanished after 1986's tax reform. But some cards still allow you to write off interest. How so? They tap into a home-equity line of credit (HEL), and interest on such borrowing is still deductible. In recent months a few banks have started aggressively touting HEL-linked cards, which are currently offered by about 10% of large banks.

For example, last November Liberty Financial of West Des Moines, Iowa launched the Tax-Saver MasterCard (no fee; 11% interest recently). Cardholders can carry a balance of as much as $100,000, depending on their home's value, well above the $10,000 borrowing limit imposed by the typical gold card. If you're in the 31% tax bracket and carry a typical $1,800 balance, the tax savings means you'd pay $61 less per year in interest, vs. a fully taxable card with the same rate. A HEL Gold MasterCard from Sovereign Bank in Wyomissing, Pa. offers attractive rates too: 7.49% for the first six months, then a variable rate of from 9.99% to 11.99% recently, depending on the size of your balance.

The savings come with a big catch, though. If you can't pay back the loan, you could lose your house. With a taxable card, about all you can do is sully your credit history. In general, experts recommend borrowing from a HEL only for justifiable occasions when it makes sense to tap your credit, such as to pay for big-ticket items like a car or school tuition. "You shouldn't borrow against your home for routine expenses," says Annapolis, Md. financial planner Steve Ames, "and a credit card could make it easier to do just that."

So if you opt for a HEL card, put it in a drawer and save it for planned uses. And think twice before consolidating other credit-card debt onto these cards: You're then exchanging unsecured debt for a loan against your house. Counsels Ruth Susswein, executive director of Bankcard Holders of America: "Consider whether the tax savings are worth putting your house on the line." --E.S.