Using Credit Cards only for Emergencies

It is advised to have money put away into an “emergency fund.”  However, there may be circumstances that occur where this is not possible.  If you don’t have the money saved and an emergency comes up it may be necessary to put the charges on a credit card.

What is an emergency

It is important to consider if it is truly an emergency.  A shoe sale or a vacation that you can’t afford are not emergencies.  True emergencies are unexpected health, automotive and other expenses.

Low or no Interest charges

You may be able to get a credit card with no or low interest charges for a certain amount of time.  To make the most of this it is important to try to pay off the debt before the interest rate increases.  If you can get no interest or low interest and pay off as soon as you can it may cost you less than normal interest fees charged at banks and other institutions.

Have a credit card in good standing

Even if you don’t normally use a credit card, it may be advisable to have one that can be used in emergencies.  If you have a card that is saved just for emergencies it may be helpful to charge something to it at least once a month.  Charge something such as gas expenses or something that can be paid off.  If you save it for emergencies, they may lower your credit limit and it may not be enough to help in the case of an emergency.

Contact your credit card company

If you don’t normally charge a lot on your card and are expecting to use it for a large expense, contact your credit card company to let them know.  If they see an unexpected charge on your account they may put a freeze on it thinking that someone else is using your credit card.

No pay day loans

You may end up paying interest fees when using a credit card, but it will in most cases be less than if you were to take out a pay day loan.  Usually the interest rates on pay day loans are exorbitantly high and it is wise to steer clear of them.

Although it is not usually advised to use your credit card for emergency expenses in some cases it may be necessary.  Consider how much you are charging and make every effort to pay it off as soon as you can.