As far as I know there are no specific extension requirements with saveStrings.

See: Examples > Topics > File IO > SaveFile1

Try changing the extension to see if it works with another extension on your system. It does on mine.

It probably freezes from an unrelated reason. Just try in a simpler sketch, as amnon.owed advised. If it works, you should see elsewhere. If your original sketch doesn't freeze when using a .txt extension, I would be curious to see the code...