Question: Has anyone succeeded in my risky strategy, or should I stick with my : virtual advisors? they have been right so far, but this is particularly : frustrating this year! The goal is two fold, > tow pay off the cards, and I would hope, to stop using the cards > unless they can be paid off in a month. > I bellieve that it makes > sense to have an emergency fund, and pay off the minimum (or more if > you can) on crds. > This is what we did, and now we dont use cards any > more. It isnt a math issue, its a security issue, to me. > Plus whic, many people have to literally learn how to have an > emergency fund, and how to pay cash for things

Answer: Not paying off the cards when you can pay them off seems more likely to breed continuous debt. Borrowing for an *emergency* (with a card, or otherwise) does not lead to continuous debt, since you intend to pay off the loan as soon as possible. This doesn’t contribute towards either goal. If you put the money you would have used for the emergency fund into paying off the cards instead, you’ll have enough money to pay off the cards faster because the ineterest you earn on the emergency fund is much less than the interest you pay on the cards. And, if you do have an emergency need for money, you can use the cards to borrow some; your card balance won’t be as high as it would have been if you built up the emergency fund first. But the time to do this is when you can afford to maintain the emergency fund without a substantial cost. The purpose of maintaining an emergency fund is so that you will not have to borrow money or sell something you you do not want to sell (a house, or investments sold at the wrong time) if you have an emergency; it’s a valuable goal, but borrowing at a high rate to create that emergency fund defeats the purpose.

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