Glad you enjoyed the blog, and I hope you visit us often.

It is important; however, to understand her audience. She is large with single moms, and women with bad credit in general,in large cities where credit card debt is charged off after 12 consecutive months of non payment and not enforceable by the shark-like agencies who by the debt for 75cents on the dollar. Like NY.

That being said, it is useless for a mother of eight to keep sending $25 per week to a card who’s balance (after repeated loanshark-like fees) is over $2,000+, if she’s living paycheck to paycheck because:

1. The credit card company will eventually see that they will make more charging off the full debt amount within that year and get a tax break similar to getting a full payment from the loanee, or
2. they will cut her available limit or cancel the card and her efforts to keep the card current for “future use” will be for nought and
3. she could loose her job and the payments she’s making which barely scratched the fees (and/or an available balance reduction) has left her with still no available credit; therefore she can’t rely on the card to cover the cost of toilet paper.

In these cases, better to pay the minimum balance and look “current/paying as agreed” on her credit report at $10 a week and bank the $15 per week, than to pay the $25 and look “current paying more than agreed” on her credit report; because the latter will be totally negated if they close her account or lower her limit.

In hard economic times, Cash is King. A CFA study in 2005 year showed that “55% of women ages 25 to 34 had less than $500 in an emergency fund. And 42% of all women said they had no emergency fund at all.” Combine that with State Welfare agencies refusing to accept new applicants or “out of funding”, do to too many recpients, and you’ve got any woman’s nightmare–with or without kids. This will lead to unsafe and often illegal behavior. Resulting in a larger need (foster care for he kids, incarceration costs for the mom)for social (government) dependence.

Been there–done that; got the matching shoes and hat.

“Ignoring” the debt would be to make no payment, making the minimum is mearly priotizing your financial obligations– and self/family trumps credit card companies all over the world.

Loved your blog,though. Very well written. I just thought you were “understating” the amount of people for whom this was great advice to.

Sylvia

Great article! Well said. It makes absolutley no sense to stash cash when you’re racking up debt at a 10-20% rate on the side.

Every single dollar of unsecured debt you have offsets your emergency fund. Making minimum payments on your credit cards is ignoring your fundamental financial problem, not being smart with your money.

It is an much better investment to take out your credit card debt before you build your emergency. This creates extra cash flow to your household, which is the lifeblood of your financial plan.

Keep up the good work!

Kyle