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Emergency?! Is now the time to use your credit card?


For most people having a credit card for emergencies seems like a great idea. It can be a good thing to have a credit card on hand, but if you do not use it properly it can actually cause more damage than good. You need to know the pitfalls so that you can avoid them completely in an emergency.

Do not forget the Emergency Cash

Just because you have the credit card to fall back on does not mean you should skip the savings account. Many great banks offer savings accounts that are made for  an emergency situation. Chase Bank offers an automatic savings account that allows you to automatically transfer a set amount in the time that you want. For instance, you can decide that you want to save $5 a week you can have that transferred from your checking to your savings. You have the ability to change that whenever you feel the need.

Your savings account will provide you with the cash on hand that might be needed if you experience an emergency that affects your cash flow, like an injury or loss of a job.Keep in mind that this will keep you from going into debt when you have no funds coming.

Use Your Credit Card Responsibly

What this means is that you need to make sure that you stick to your plan of having the credit card for emergencies only. Do not use your credit card without adequate cause. Keep your balance at zero so that if you do need it the balance is available to use. Pay off anything you do decide to put on it before it is due.

During an emergency use your cash for everyday living. Try to keep the use of your credit cards to a minimum. That requires you to really think about whether or not you really need what you are spending your credit on. This is going to need to be paid back in a timely manner to keep your credit from taking a major hit. Unlike the cash in your savings, your credit card is essentially borrowed money.

While you are recovering from an emergency remember to put back the money into your savings. You will want to make sure that you are making payments to aggressively bring down your credit card balance. You need to begin saving for your next emergency right away. It may mean being tight with your money for a while, but it is much better than being hit with unexpected expenses later on.

By taking in these facts, you can be prepared  for whatever life throws at you. Realistically and Ideally, you need to realize that emergencies happen quite often. For minor emergencies, like a blown tire or a broken cell phone, a credit card is ideal. However, you need to have a real plan for long-term emergencies like job loss or an accident. This is the best way to do so.

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