Throwing extra money against your consumer debt is a very good thing to do.  (The credit card companies hope that you don’t do this, because it allows them to charge you interest for a really long period of time, sometimes over a decade.)

So if throwing extra money at your debt is good, throwing more extra money is better, right?  Yes, but up to a point.  If you throw every last spare dime you have at your debt, it drains your bank account, and you’re left with no cash if the car breaks down, if you have a debilitating toothache, if your roof springs a leak, etc.  You have no emergency fund, and out come the credit card again, with an increase in your balance soon following.

The moral:  Build up an emergency fund so that if you need to shell out $500 or $1,000 for an unexpected expense, you have it to spend.  Building this up will slow your debt reduction, but the peace of mind is worth it.

• Ask Mr Credit Card has posted the Carnival Thanks go out to Ask Mr Credit Card for posting this holiday-time Carnival of Debt Reduction.  Several of the submitted posts caught his attention for Editor's Picks: Free Money Finance discusses the benefits of debit cards Blueprint for Financial Prosperity explains why he thinks Dave Ramsey is brilliant The Digerati......
• Debt reduction tip: Expect the rules to change Do you have an emergency fund?  You do?  Great!  You may have to draw down on that emergency fund to throw extra money at your credit card because the issuer changed the rules on you! It's no secret that banks are bleeding and buckling under the weight of huge losses. ......

• The Basics of An Emergency Fund And Why You Need One If you do not have an emergency fund, you’ll want to work on getting one set up.  An emergency fund is just that - it is the equivalent of 3 to 6 months of living expenses, set aside in an easily accessible account to be used only when financial emergencies......
• Another Case For Emergency Savings - Credit Score You know you need emergency savings right? Should something come up where you need money quick you want to have emergency savings handy to help take care of the situation.  Well here's another aspect to think about: You need emergency savings to protect your credit score! An emergency comes up. ......