Having an emergency credit card is one of the best investments you might ever make. What is an emergency credit card, you ask? Simple. It's a credit card that you keep set aside for use only in an emergency. That's all. If you've ever been faced with a sudden illness (your own or in the family), or needed to suddenly get somewhere for an unplanned event (think: funeral), you know how handy an emergency credit card would be to have. Or perhaps you're a student and the new term starts but you need to pay your tuition bill, or buy new textbooks. Again, it would be nice to have your own emergency fund rather than to have to beg family or friends for cash.
For the simple reason that unexpected disasters can strike any time it's good to have an emergency fund, whether it be a cash savings account or a credit card (or both). Having an emergency credit card available at all times can literally save your life if the wrong thing happens at the wrong time.
When deciding on which card to use for an emergency back-up, it's important to look carefully at the details. You don't want your emergency card to create more problems than it solves.
What constitutes an emergency? Anything that may affect your basic life needs: your health, food, shelter, or emergency travel home or emergency travel to a significant event (such as a funeral). Going to a concert that won't be around in a couple of years is not an emergency. Neither is a really good sale on shoes. Getting stuck without transportation in the middle of nowhere at 3 AM could certainly be considered an emergency, though.
Make sure that your emergency card has enough of a limit that you'll be able to charge anything that may come up; in other words, try to budget for emergencies. I know that sounds like a contradiction, but be honest with yourself, and try not to have too much credit available. If you have too much credit, you may find yourself rationalizing what is and is not an emergency, so choose carefully when you apply for a credit card.
Also, gone are the days that you could just get an emergency card and put it away in a drawer until needed. Many credit cards nowadays can cancel your account if there's no activity. Use it perhaps once a month for some random expense that you would normally pay cash for, say groceries or auto repair. Then, pay the bill when it comes. Activity like this will ensure the card remains open, and that you'll have it when you need it. Also, if you are faced with an emergency, contact the creditor for that account. If they suddenly see a large purchase, they may flag the account for unusual activity, and freeze the card, and you don't want that at the time you need it most.
If you do charge emergency items or services on the card, try not to charge more than you can comfortably pay off in three to six months. Paying it off quickly will also ensure that you'll have it again for the next emergency that you can't predict.
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