If a car breaks down or an emergency plane ticket has to be purchased, an emergency credit card is very helpful to have. Although it is a good idea to have emergency savings, maintaining an emergency credit card or two can be just as financially intelligent because they would work with any kind of credit card processing. Having a credit card that is properly maintained is a positive addition to a person’s credit history.
The benefit of having emergency credit is that if savings have to be temporarily used, there is still a second option that can be relied upon for emergencies. There are certainly some points to consider before one applies for a credit card that they intend to use for emergencies only.
Make it clear to yourself exactly what the card is for
Emergency usage is a relative term that varies from person to person. Some may just want a credit card as a second or third option for bills if their savings or other funds have to be spent. Others prefer to have emergency credit while traveling as a backup source of money in case they run out of their allotted travel funds and need to use a credit card processing machine.
Regardless of what the card is intended to be used for, it is important that you specifically write down or state the purpose of the card before you apply for it. This way you will avoid using the credit card for purposes outside of your original intentions. People run into problems with emergency credit cards when they begin to use their credit for other expenditures.
Shop around for the best rate
Since you are not going to be using the card for other purposes beyond emergencies, you might want to shop around for cards that offer 0% APR for 6 months to a year or longer. If you have the opportunity to shop around at different card companies, try to find one with 0% APR for a while. That way if you use the card in the next few months after getting it, you won’t have to worry about the APR for a while and have more time to pay off the balance.
Pay the balance off if you have to use the card
In the case that you have to use your emergency credit card, it is important that you pay off the balance as soon as possible. In order to avoid the high APR costs of many credit cards, pay off the balance preferably before the next billing cycle. This way you will not have to worry about any interest costs which cause a lot of trouble for merchant accounts. You might also consider getting a temporary second job or freelancing temporarily just to have a bit more income to pay off your card after your emergency has been taken care of.
If you make the emergency purposes of your card very specific and stick to those purposes only, and pay off the balance as soon as possible if it has to be used, you will be able to benefit from your emergency card without running into problems with credit card processors.
