The Highway Forums General Discussion Open Forum bankruptcy

Dave Ramsey does have some good advise, and questionable advise.

First seek out a reputable credit counselor. They will act as an advocate with your creditors to get you payments reduced. They will also help you to see what you can cut from your expenses.

Second use Dave Ramsey's credit snowball. Make the minimum payments on your bills except for the smallest. On the smallest pay the minimum plus all you can add to it. Then when that is paid off add what you paid on it to the next smallest bill. (Some would recommend paying off the highest interest rate first. Dave's point is the boost that comes from seeing progress in getting the bills paid off!)

I do question Dave's opinion concerning credit and debit cards.

1) Credit cards have a federal law that limits your liability if it is stolen. This does not exist on debit cards, though the bank may have a policy that will help.

2) A compromised debit card has direct access to your bank accounts. A credit card has a limit.

3) I've learned from my son's painful experience that there is a lag between a purchase and the money coming out of your account with a debit card. So it is possible to double spend the same money!

My recommendation, after getting your house in order and if you really need plastic, is to have only one credit card with a low credit limit. If you see a big item coming up that will over spend the credit limit (say tickets and hotel for a trip), estimate the amount needed and pay it first to the credit card.