Comments on: New Rule: Pay Only The Minimum On Your Credit Cards.

By: Carol

Carol — Wed, 15 Apr 2009 02:48:44 +0000

I agree with the advice and would even add another layer. For many, the 3 – 8 months of expenses in savings takes precedence over retirement plan contributions. If you don’t and end up needing the money then you may be forced to take from the retirement plan but now with a penalty.

By: Kate@LivingTheFrugalLife

Kate@LivingTheFrugalLife — Wed, 08 Apr 2009 17:13:05 +0000

We sort of came to a similar conclusion a couple of months ago. We have no credit card debt, but we looked at our mortgage the way that others look at cc debt, and we’d been paying quite a bit extra each month. We also have six months’ expenses saved.

But with the real possibility that my husband will be out of a job at the end of June, we stopped paying anything but the minimum required mortgage payment. We’re saving what we would have paid of course. Even if my husband is not out of a job in June, we decided to add a couple extra months’ worth of expenses to our savings. Once we have 8 months’ of expenses saved, we’ll start paying ahead on the mortgage again, so long as he has a job.

We’ll recast the mortgage in early June if we don’t have a clear picture of his employment prospects by then, or if it looks bad. But obviously, there’s no recast option with CC debt.

By: Stephanie S.

Stephanie S. — Wed, 08 Apr 2009 01:49:05 +0000

Yep, that’s how we got transferred to the supervisor, we told them we had a 0% offer that we were considering using unless they lowered the interest rate. And then we told her the same thing.
We followed the guidelines of how to ask for the rate reduction that I found on various financial blogs.
I can’t believe it backfired so bad. I’m still kinda in shock.

By: david

david — Wed, 08 Apr 2009 00:44:26 +0000

Did you tell them you would be transferring it out? I have never had anyone say no and then do those things, how strange.

By: Stephanie S.

Stephanie S. — Tue, 07 Apr 2009 22:53:03 +0000

This doesn’t have much to do with this specific post, but I thought you might be interested in the conversation we just had with Bank of America, asking them to lower our interest rate. It really back fired on us and we won’t be asking that question ever again.

http://andlifegoeson-andon.blogspot.com/2009/04/bank-of-america-credit-card.html

By: RAJEEV KUMAR SINGH

RAJEEV KUMAR SINGH — Tue, 07 Apr 2009 19:55:44 +0000

Great post having some radical thoughts..but must say the crisis isnt bad all across especially in INDIA..(lot of your readers are from INDIA) and as such I dont think it makes sense for us to pay off only minimum due . The card companies are not in atearing hurry to close your cards here and as such one should avoind revolving money on cards.But for US, it does makes sense.

By: david

david — Tue, 07 Apr 2009 19:54:26 +0000

Who said credit cards are bad? Certainly wasn’t me, I don’t think they are!

By: Tyler

Tyler — Tue, 07 Apr 2009 17:39:57 +0000

I still don’t understand this whole thing with “credit cards are bad.” Use your credit card to pay for things, and pay your bill in full at the end of the month. Simple.

By: Jamey

Jamey — Tue, 07 Apr 2009 15:48:53 +0000

I understand where Suze is coming from and it makes sense, but it makes me a bit anxious. I’m thisclose to having my credit card paid off. I feel like my priorities are too pay off my credit card before Xmas, then get my rainy day fund sorted.
Call me old school. But again, it makes sense.

By: david

david — Tue, 07 Apr 2009 15:38:20 +0000

Might be worth thinking about, Katie. Or, just pay it off and buy little things here and there to try to keep it open. It might not work, but it’s worth it to try.