Suze Orman's advice has now changed

[red92s]

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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.