December 31,2008
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Bring Your Credit Umbrella in Case of Layoff, Pt.2 –
– Red sky at night...Before you find yourself in one of these typical credit card binds, an ounce of prevention is far better. Here's what you should do now:
- Establish two or three secondary credit cards while decreasing your total debt-load. Place small charges on each credit card, but make sure all charges combined are less then your total payments (start reducing your debt immediately).
- By all means, don't spook your credit card lender, especially if you only hold one card.
- Open a savings account and determine a percentage you can put away each month. Make it a priority. Automatic deductions work best. HSAs are tax deductible and tend to life's essential – health. (HSAs are secured health debit of credit cards) Be creative, but serious.
- Consider the normally wasteful option of the lay-off security plans offered by every lender every time you turn around and buy the lay-off insurance if you believe your job is viably in doubt.
- Formulate a ‘Plan B' that accommodates an ‘unemployment winter'. This is coming and can't be stopped. Credit cards cannot be the ultimate answer but, they must act as a critical fallback. Our government has already proven to us (at least, under Bush) that they are okay with 20,000 Americans dying every single year for lack of health insurance. This desecration of moral judgment will take some time to fix because it has been fostered for the last eight years. You can die if you don't have a credit card.
- Formulate a ‘Plan C' that accommodates both an ‘unemployment winter' and a ‘credit card winter'. These will be real possibilities for millions of Americans through the coming year. Plan B is only an interim, in hopes of not receding into an ‘economic ice age'. Plan C must wean away from credit card dependency. Lifestyles must change.
- Don't burn bridges, but do put up partitions. Our nation's stability (indeed, the world's) is precarious right now and the only safe thing to do is to expect the unknown. Seek counseling early, before defaulting or ‘spooking the skittish'. Free counseling abounds, but make sure it's not from ‘friends' or scammers. Always check credentials and reputations first.