Suze Orman's advice has now changed

[EEinNJ]

It never hurts to have cash available, even if you have debt. I don't watch Suze much, but I did catch this piece. The funny part was watching all her gestures, the way she talks with her hands. Now when I talk about personal finance with my wife, I make sure I wave my hands around a lot

[Joan.of.the.Arch]

IThe funny part was watching all her gestures, the way she talks with her hands.

I saw the Saturday Night Lives skits of Suze Orman before I ever saw her for real. When I finally did see her, I had to kind of laugh because I felt I already knew her from SNL. Those hand gestures are truly part of the package.

[blankcheck]

I don't have a problem with this advice. Let's say you have a CC debt of $5000 and you have a plan to pay that off in a little over 10 months. At the same time, you have an EF of $500.

If you stick with putting $500 towards the debt and lose your job 8 months in, you have 4000 put towards debt, none of which you'll ever see again, and 500 usable to you.

If you put into the EF first, you have 4500 to cover expenses including the minimum CC payment.

Think about which position you'd rather be in if you needed to buy time looking for a job.

[Scanner]

In the other thread, they are also advising that credit scores (I frankly never understood all the fuss here about them - 2 or 3 points here or there) are becoming more irrelevant.

It appears the downpayment you are able to muster is more relevant to obtaining credit for a car or home.

I currently have a credit limit of 11,500 on my Citibank (which was raised recently from $10,600), which is essentially a personal card but contained to business expenses. I must say I would be pissed if they lowered it to $2000 as sometimes I need to make a large purchase and float a balance for 30 days. That being said, I could get creative with other means of purchase (take my business LOC and move some into my checking and pay by debit card).

I am wondering though, if Suze Orman is worried about people not having emergency funding, what about those "Credit Protection" services that all card companies get you to buy in case you lose a job, etc? I frankly don't know anything about them and always decline the sales offer.

[Ima saver]

I never bought those services either, I just pay the card off in full each month.

[red92s]

[QUOTE=Scanner;214594

I am wondering though, if Suze Orman is worried about people not having emergency funding, what about those "Credit Protection" services that all card companies get you to buy in case you lose a job, etc? I frankly don't know anything about them and always decline the sales offer.[/QUOTE]

I had a very helpful Citi rep offer to send me the "credit protector" information after assisting me with a disputed charge. He was so helpful with the dispute part, I figured I'd do him a favor and let him sign me up for the free trial period, knowing someone is probably watching how many people they sign up.

Upon receiving the materials I immediately canceled. I was never interested to begin with, but it sounded like a lousy system. If you loose your income, you can suspend your payments, but you cannot make any new charges to the card. If I lost my income, I would want my credit lines to remain available . . . in the event my 5 month emergency fund was insufficient.

[FoolFromAZ]

This is an excellent advice, especially for people like me. Infact this is what exactly I have been doing for the past month or so. I stopped paying more than the minimum payment of any of my credit cards, although I am paying 10% intrest for some of the credit cards. Bank of america reduced the credit limit from 22000 to 3500. which really pissed me and made me to think about 6 to 9 months of emergency fund before any debt payment. I always used BoA america CC for my emergency. Infact my wife lost the job few months ago, so I needed money to pay the bills, I used BoA CC convenient check (no transfer fee), to move 5K to my checking account and paid
some bills.

I have got around 43K of CC debt. Intrest rate varies from 0% to 10%. As I stopped sending more than minimum payment, I have 4K in my emergency saving account. I keep putting all extra money in to that account, until I have around atleast 6 months of emergency fund. 6K * 6 = 36K.

My FICO may not go up for now. but I am not too stressed out about what I would do if I or my wife lose the job. with the current economy and news I have been hearing pretty much everyday these days, CASH is KING.