Before touting my success as an animal rights activist and pet quilt designer, I'm know as a "credit and debt collection Goddess". Since 1991, I've been a credit and debt collection specialist and have written two self-help software titles; "The Credit Work Book" and "The Ultimate Debt & Credit Handbook", with the latter being available as an e-Book at www.findlegalforms.com. Both products/publications are based upon my tried & true legally proven method that I have employed for years in my legal services office, New Century Legal Center. I apply gorilla tactics when dealing with credit reporting agencies and their multitude of reporting errors. Sometimes, it takes the threat of legal action to get the CRA (shorthand for Credit Reporting Agency) to get off their penguin's duffs and delete the ruinous information off a client's credit reports (Trans Union, Experian, Equifax & Innovis).
For the past several months, I have been watching Suze Orman
very closely. She pops up everywhere, on CNBC, Oprah, Dateline,
advice columns, etc. However, I have a bone to pick with Ms. Orman
whereas lately she has been giving people [in my own professional
opinion] some really bad advice. What is it? Orman telling people
to pay only the minimum amount due on a credit card. People,
please, do not listen to this very bad
advice! Credit card debt is a cancer that is eating
away your finances, and it is costing you a fortune in finance
charges and leaving you wide open with your other card issuers
which will pull your credit report to "review your current
account" see that you have only been paying the minimum, jack
up your interest and fees and lower your credit line.
Why is Suze Orman telling everyone this? Good question! Orman is
the author of multiple personal finance [best sellers] books and a
host of a popular CNBC show. In March she advised her fans and
followers who do not have a "fully funded emergency savings
accounts" to start paying only the minimum amounts due on
credit cards and instead route any extra money into savings".
Orman quote, unquote:
"If you have an unpaid credit card balance and not much
saved up in emergency savings I need you to listen up. My advice
has changed".
"I want you to only pay the minimum due on your credit card
balance and instead make it your top priority to build up as much
of an emergency cash fund as you can".
Oh, really? This bold directive makes a great sound bite, however,
I just wish it was good advice. Folks, unfortunately, it is
not!
People, people! Right now, paying only the minimum amount due on
credit card balances is exactly the type of behavior that will
attract unwanted attention from the credit card companies that
Orman is warning you about. She is talking out of both sides of her
mouth.
Paying down your revolving and credit card balances is a win-win
situation! You save on interest, and you have freed up lines of
credit that can be used again in a situation, for instance, you
need a new furnance in your house or air conditioning unit, a new
fridge, stove, washer, dryer or other major appliance. I always
advice people to purchase major appliances with a credit card
because of warranty and the ability to dispute an appliance that
turns out to be a lemon.
These days, lenders are cutting off access to credit just when
people are likely to need it most. Bankers are freezing or lowering
limits on credit cards and home equity lines of credit or closing
accounts altogether.
Should you have an emergency savings account? Everyone should have
a standard savings account. By paying yourself $20.00, $50.00, or a
$100.00 per month or week, you'd be surprised how fast this can
add up. If you have direct deposit at work, have your employer
deduct from your paycheck a sum certain and set it aside in a
savings account. Credit unions have some great savings products, I
recommend you check them out.
Sorry, Suze, but your recent advice is just plain wrong. It is
unfortunate that a lot of people tune in to her show and live by
every word that she tells people. Beware and be wise.
Ellen R. Day
Credit, Debt & ID Theft Specialist
Legal Investigator
Estate Planning & Asset Protection
New Century Legal Center
http://www.nclc.law.officelive.com
Email: nclclawcenter@comcast.net
