|Suze Orman: Tips to pay off credit cards
Friday, January 09, 2009
In this article, Suze Orman offers some sound advice about creating an emergency savings fund instead of using credit cards for emergency. She has more great advice as well, it's worth a read.
"The best way to insulate yourself is to get out of credit card debt once and for all. If you pay off your balance, you don’t have to worry about the interest rate on your card. If you pay off your balance, you are less likely to have your credit card limit reduced; and even if it is reduced, it will not have a negative impact on your FICO score.
If you pay off your credit card balance, you can focus on building an emergency savings fund. That’s especially important in 2009. The days of using your credit card as a de facto emergency fund are over. If you tap too much of your credit card line, it is likely you will see the line reduced, your interest rate rise, and, yes, potentially have your card closed down — and there goes your FICO score. Unpaid balances in 2009 will put you in the middle of a vicious cycle. You must get out of card debt now. It is the number one action to take in 2009."
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