Can debt be a safety net?

Normally, I dismiss the countless unsolicited financial products I get in the mail every month out of hand, but I'm tempted to bite on a particularly persistent one. In the deluge of pitches I receive from my bank, Royal Bank, every month, one of the recurring items is an offer of an unsecured line of credit. They're offering $10,000 at a rate close to prime, if I recall correctly.

I currently have a high-interest savings account that doubles as an emergency fund and condo downpayment fund. If something like a job loss were to happen now, that's what I'd be dipping into to tide me over. But when I eventually come around to buying a place of my own, I'll probably be inclined to empty the entire thing (so as to maximize my downpayment) and knowing myself, I know I'll be tempted to pour every spare cent I have into paying off the mortgage after that -- at least for the first year or so, until I've convinced myself I'm not actually about to get fired on a daily basis.

The long and the short of it is, when I liquidate the fund to buy real estate, I'll find myself in the position of not having an emergency fund, at least in the short term, to pay for those unexpected emergencies. (I'm told having three months' expenses is a good guideline.)

What I'm thinking of doing at the moment is to sign up for this unsecured line of credit as a sort of insurance policy. It doesn't cost anything on a monthly basis unless I take money out of it (which I wouldn't do as long as I had that $10K in savings I currently have) at which point I'd pay interest on the withdrawals. That way, should the need ever arise, I'd dip into the line of credit, as opposed to the emergency cash that's I'd already have wisely invested into minimizing my mortgage.

I suppose this is all moot until I actually need it, but I'm tempted to sign up for it now. I'm sure the rates offered by banks on unsecured loans start to change once you've borrowed six figures to buy a house, so my reasoning was to sign up now while I'm an excellent credit candidate.

Any thoughts on this? You don't have to remind me of all people that, as a general rule, debt = bad, but is it not better for my long-term financial wellness to not have 5K or more sitting around in a savings account when that money could be put toward paying down a future mortgage? I suppose there might be some negatives in terms of credit rating to consider, but the thought of having several grand sitting in a bank account while I have a six-figure debt to pay off doesn't sit right with me -- and I haven't even taken the plunge yet. It just seems a waste to hoard cash for a rainy day that might never come.

Is this not a situation where debt is actually the smart financial decision?

Financial porn?

Some people have soap operas. Others gorge themselves on Sunday afternoon football.

Me? I've got my debt shows.

They're all over the dial of late, from W network's Maxed Out, to Life'sSlice's Till Debt Do Us Part, these shows focus on how out-of-control people's spending habits have gotten in today's day and age, and to varying degrees they offer help, whether in outright debt relief or at least an action plan that the subjects themselves can hopefully use to get out of their habits.

I watch these shows religiously every time I catch them on the dial. Some people's attitudes toward credit cards and their obsession with acquiring materialistic crap they neither need nor can afford simply astounds me. I guess I'm a bit of a voyeur that way. But there's a steady stream of shows to give me my fix. One blogger, admitting to her obsession with keeping an eye on the pfblogosphere even though she wasn't a contributor, recently described it as being like "financial porn" for her -- a rather apt description I thought. And one that could also apply to my obsession with debt-related reality television.

There's even a big screen documentary coming out that I'm anxious to see, although as of yet there appear to be no Canadian theatrical release for Maxed Out a documentary about the predatory nature of the US credit industry.

Looks like a good one.