First, Suze Orman makes a big switch and recommends saving your cash instead of making extra credit card payments if you are out of work
Now Internal Revenue Service changes its mind and says you can deduct the extra convenience-fee you pay if you pay your balance due with plastic. Not the interest, though. Let's not get giddy.
Neither seismic shift has anything to do with the recent spike in Alaskan volcano and earthquake activity as far as I can tell, but they are big.
Unlike some of Orman's pronouncements, making minimum payments credit cards in order to stash away more cash for emergencies makes sense. It might even be better for the economy, writes James Surieowicki in The New Yorker. It's tough to get past the idea that credit card companies need the fees they pull out of our wallets to unjam the finance system, though.
But let's not go nuts with this idea. Being debt free or as nearly so as possible is still the thriftiest way to ride out the recession if you can swing it. Cutting expenses, setting a budget and sticking to it ruthlessly is still more effective than stringing along the credit card companies. They make money and you don't when that happens. If you are getting anything close to the national average $2,975 tax refund this year, think about using some of it pay down your highest cost plastic.
Orman didn't say so, but it's more important than ever before to make those payments on time if you go with her minimum payment idea. Potential future employers will be looking at your credit history too, along with landlords and your car insurance company. You can't afford the dings right now.
And there are some bills you need to pay no matter what - your mortgage, your car payments, and probably your health plan are nearest the top of the list. That's stuff you need and can be taken away if you don't pay. It's harder for the Capitol One crowd to repossess money you don't have.
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