Establishing the Emergency Credit Card

Whether you are an avid credit card user or you prefer to live a cash-only existence, there is one time in everyone’s life when a credit card is a handy resource to turn to for help. Emergencies, those occasions or circumstances we can never prepare for, often leave us hanging in the balance financially. Unless you are independently wealthy or have a sufficient savings fund for emergencies, applying for a credit card may be your next best option.

Why the Need for Emergency Credit?

There are a multitude of things that can happen or go wrong when you are not financially prepared. For instance, consider home repairs, car repairs, travel surprises, and even the death of a loved one. If something should happen to a family member that requires you to take the next plane out of state, it can be harder to accomplish with just cash. You can’t book a plane ticket over the phone with cash. You may be hard-pressed to rent a car with cash. What if your vehicle breaks down on the side of the road before pay day? A credit card will at least help you get the vehicle towed to a safe location. Imagine your heating system breaking down in the dead of winter. Your credit card can help you get the repairs you need to survive the cold nights.

How To Manage An Emergency Credit Card

Even if you do not generally use a credit card for regular purchases, it is a good idea to apply for a credit card to be used as emergency. Here are some tips for managing a credit card meant for emergencies:

Discuss Family Finances

Couples should sit together to set the limitations for what constitutes an actual emergency. Write down the things that may be considered an emergency to allow for use of a credit card. This will help eliminate temptations to spend on credit what you can’t afford to pay for in cash.

College Student Rules

Often parents will give their college-aged student a credit card to be used for away-from-home emergencies. In this case, a discussion should also include what constitutes an emergency on campus such as school supplies or travel expenses that come up unexpectedly. Parents need to reinforce that late-night beer runs and the like are not considered emergencies and put consequences into place for misuse of the card.

Safe Keeping

Again, to eliminate temptations, don’t care your card in you wallet. Put it in a safe location at home such as a safe or locking cabinet. Take out the card only when you need to use it. In the event of an emergency on the road, put your card’s toll free number into you phone so you can contact your card issuer to validate you are a card holder.

Check Statements

Even if you do not use your emergency credit card from month to month, you should still check your monthly statements for any errors or fraudulent purchases. This may be the only way to ensure on a regular basis your card number has not been stolen. Never take for granted that your credit card identity is completely safe just because you rarely use the card.

Have a Plan

Even when you use a credit card for an emergency, you still need to have a plan to pay off the balance charged. One sure way to have the money you need is to automatically allocate monies each month to a savings account to be used for emergency reasons. The credit card will be handy for paying for your emergency and the cash funds in the account can be used to pay off the balance in full at the end of the billing cycle.