We're just getting started in our total money makeover (Dave Ramsey) and we should have our 'baby' emergency fund saved in the next few weeks. After that, it's on to the debt reduction.

We have maxed out balances on 3 cards (total: $7500) and a never used card with a $5000 available line on it. I'm cutting up the three that have balances, because I want to make sure they don't get used as they're getting paid down.

But we're hesitant to destroy the untouched card, because we don't know what we'd do if we had a much bigger emergency than the $1000 would cover. (We live in Florida, and our hurricane damage deductible is $5,000, for example.)

So I've devised a storage place for the unused emergency card that would be such a pain in the ass to get to, that I can be certain it would never get used for impulse purchases.

But part of me thinks that having one intact card with a large line is dangerous, based on our past history.

So help me out, what do you think?

I voted "hide it". I wouldn't worry too much about your past history seeing as how you've committed to turning around your finances. I've been at that starting point, and know how easily it is to get addicted to saving money .

I vote keep it. Just as AA meetings don't keep people from drinking, Dave's plan (or hiding the card) won't keep you from using it if that's that choice you make.

Don't destroy it. If you need it you will regret it.

Take a small plastic Gladware container and fill it with water. Put the credit card in there. Put the container in the freezer. Now, getting to that card is a hassle that will take too much time and effort to use it frivolously, but it's there if you need it.

I voted to keep it. I think the card is not your problem, it's your attitude about using credit. Change the attitude and the card will no longer be a temptation. You'll be a saver instead.

However, you're obviously the best judge of yourselves and your habits, so you will know the answer better than any of us can.

Fill a coffee can with water. Put in freezer for a couple of hours. When it starts to get a little slushy, put the credit card in. Freeze.

A metal coffee can is harder to microwave, so you'll have to really, really want that card.

The freezer idea is pretty funny. But if you can still read the card number through the ice you're back where you started! Better freeze it in orange juice or something.

I keep mine in a drawer at home. I have a couple, mainly b/c I've heard it's bad for your credit rating to cancel them. Mainly I like to keep as little as possible in my pockets. My wife refuses to leave the house without a credit card, even though she never uses it - she sees it as an emergency back up plan, and I can see how that's true.

I frequently use my debit card as a credit card. I don't think that counts, b/c I've paid myself first and and don't let overdrafts happen.

These responses have been hysterical! I particularly like the idea of freezing it in a metal can so you can't microwave it!

That sounds like the voice of personal experience!

Last night, we had a 'plasectomy,' cutting up all but the one emergency card. That one simply went into a bag in our bill file for emergencies. Like Rush said, just like AA meetings won't keep you from drinking, hiding the card won't keep you from using it if you decide to do that.

Also, my planned storage place was pretty hard to get to, and my wife had a good point that if something happened to me, and the emergency required her to use the card, she wouldn't be able to get to it.

But most importantly, we're done with credit cards. This one is just a security blanket for major emergencies, until we get to where we can manage them on our own.

Also, I have to refinance my house next year to get out of my bankruptcy interest rates, and some unused credit on my history helps my score. (My score has already gone up a few points just by having some unused credit, believe it or not!)

Thanks to everyone for your ideas!

Croz,

I said "destroy it". I figure even if you cut it up, if you ever really need it again, you can phone up the card company to report it as "stolen". They can just send you a new card, but it will take a little while for you to get it, allowing you the few days to think over whether you really need it or not.

cheers,
squished

Once I paid off my credit cards, I closed a few and left a few open. It's good for your credit score to have some (but not too much) available credit, and I figured that if I ever really needed them I could just open up my little safe and use them.

If you have trouble staying away from extra credit card spending it might be better to destroy them and close the accounts, but if you have it under control they can be a real asset.

FYI, this is exactly what I had in mind when I said "hide it" -- not necessarily anything crazy involving suspension in carbonite , just out of your wallet and out of your mind. I think the plan you went with is right on track.

I agree with the posters who say to change your attitude; that's the only sustainable long-term solution.

It's like snacks. You can either keep snacks in the house and train yourself to avoid them, or you can sidestep the issue by not keeping snacks in the house. But if you avoid confronting the problem you will always crave snacks, for the rest of your life.

It is very hard in the beginning to resist temptation, but like everything else if you can get over the initial hump it becomes a habit.

I've always had a hard time resisting snacks, but by keeping them in the house and willing myself to not eat them (except very occasionally as a treat), I have successfully reduced my desire to eat snacks. Because I have them so rarely it doesn't even occur to me to eat them anymore.

Same goes for credit cards. I had $27,000 in credit card debt at one point in my life and finally paid everything off about four years ago. I've been totally debt free ever since but didn't cancel my cards (well, I did cancel one of my two cards but replaced that one with a new one, so I still have two cards, which is all I've ever had). I simply treat my credit card as if it were a debit card and never charge more than what I can pay off in a month. Yes, it was hard at first, just like changing your diet is hard at first. The trick is to make it a habit, or to make it an "un-habit." I have an "un-habit" of using my credit card...I only use it occasionally, mainly when I buy gas for my car or if I have to reserve an airline ticket or hotel, that sort of thing. And I use it to buy things online, but I don't do that very often. I use my debit card or cash for everything else. It's just a habit, one that was hard at first to develop but one that is easy to maintain once you're used to it, precisely because it is a habit.

I think its a bit different to snacks, there is no legitimate reason for having snacks in the house other than that you want to eat them, whereas this credit card needs to be available in the case of a serious emergency.

Maybe though you'd be better off having a $5000 initial emergency fund before starting on your debt snowball. I realise messing with Dave Ramsey is controversial to some, but you have to do what works for you.