Comments on: Reader Question – Keep Emergency Fund Or Pay Off 0% Balance Transfer Credit Card?

By: Kira

Kira — Tue, 28 Jul 2009 20:21:27 +0000

I know this is an old post, but I’d like to weigh in. I think I’m more w/ Pete and Nelson. Keep $1,000 in an emergency fund and pay off the rest. People are doing all sorts of irrational things because they are scared right now, and there are always ways to trick your mind into thinking you have more $$ than you really do.
I would tell Diane that if she has a job, and doesn’t like the idea of having that debt around (albeit at 0%), then pay it off. If something comes up, she’ll find the money somewhere else (cut back on expenses, sell stuff, etc) and still come out better off on the other side.
In this economy, there’s nothing that makes you feel more in control of your life than not violating your own values. I recently closed my oldest line of credit (Citibank) with a $15,000 credit limit because I didn’t like the fact that they took (and abused) so much TARP money. I’m sticking my loyalty and my $$ where my values are. (Yes, I bank with USAA.)

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By: Heidi

Heidi — Wed, 07 Jan 2009 02:24:10 +0000

Great article, I linked to it at my site

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By: Nelson

Nelson — Wed, 31 Dec 2008 04:40:16 +0000

Sorry guys, but I have to disagree. The point is made that the reader needs to have cash on hand just in case of an emergency. But the reader will have a credit card just sitting there, without a balance, just waiting to be used.

If the credit card company decides to cut their limit big time (which, btw I think is EXTREMELY unlikely) they can just find another 0% card to use. I’m guessing it won’t be that hard.

I don’t understand the point of having a whole bunch of cash on hand when a credit card can handle just about any emergency that’ll come along. Worse case senario puts them back where they are now. Big deal.

It sounds like Diane places a very high value on being debt free. Why not encourage her to do so, just so she can sleep a little better at night?

This is an interesting topic though. I think I’m going to do my next post on it. Come check it out.

Nelson
http://www.nocommunism.ca

By: erika

erika — Tue, 23 Dec 2008 21:15:12 +0000

I have exactly the same amount of cash in my ING account, and i do the same thing with my0% debt. i think this is the best bet for now.

Agreeing with ya Dave

By: Pete

Pete — Mon, 22 Dec 2008 15:32:11 +0000

I would personally keep a $1000 emergency fund, and then use the rest towards the debt. Whatever is left over just get intense about paying it off, and it’ll be gone in no time! Then you can start stockpiling cash again!

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