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Emergency fund

Submitted by Philip Brewer on February 2, 2008 - 06:22.

This is why I've said many times that people should have an emergency fund, and not just rely on access to credit as their protection against lost income or unexpected expenses--access to credit can be lost at any time.

As Dwight says, I doubt very much that this is the banks trying to protect customers from their own foolishness. Until recently, the banks have made a lot of money from their most foolish customers. In an economic downturn, though, the foolish customers may well stop paying not only the interest and fees, but also the principle amount owed. The banks are just trying to stop the bleeding from their own bottom lines.

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