Living With an Emergency Credit Card!

Living with Emergency Credit Card

Image by © Anatoliy Babiychuk

I’m a bit flabbergasted with the horrible and unfounded Financial advice that many are given in living with credit cards.  In fact, we are taught in society today that it’s quite normal to carry around a plethora of plastic, pretending to be rich and spending what you don’t have.

“Fake it till You Make It” some consumer advocates and poor financial planners spout out at those trying to better their financial situation.  It’s no wonder that the typical consumer carries more than five figures of debt and one pay check from a disaster.

Many struggle to save, have poor spending habits and don’t even have an Emergency Fund and then bellow out that their always broke.  I concur with Financial guru Larry Winget when he says “It’s Your Own Damn Fault!” It’s no wonder Winget’s best sellers such as ‘You’re Broke Because You Want to Be! and ‘Shut Up, Stop Whining and Get A Life!’

Ok, so I digress. Let’s get to the real meat and potatoes of this post.  If you’ve been following posts on here, you may have already read an older post ‘How I Live Without Credit Cards’, this post is simply a continuation of the Journey to Financial Freedom and my hopes that it will help other readers that haven’t really examined what credit cards maybe doing to their financial life.

In fact, as an update, I’m currently living with a single Emergency Credit Card that I use just for that purpose.  It has no real thrills and frills like a lot of cards out there, but it does allow me the freedom to charge for those times when cash is not ideal.  Think hotel stay, renting a vehicle, charging tickets for travel e.t.c.

Now, I don’t want you to get the wrong impression of the use of an emergency credit card.  In fact, below should be considered the paramount ways and justification for use of such a card.

Ways to Use An Emergency Credit Card to Stay Out of Debt

  •  Find a low interest APR credit card. Make sure the interest stays low and not a teaser rate that goes up immensely the following year.
  • A plus is to find a credit card that pays money back ! There are many choices out there, but err on the side of caution
  • Always set a minimum limit. In fact, my limit is something very manageable that I can easily pay off when the bill becomes due.  Warning:  If you can’t manage this, don’t get a card !
  • Only use this card for genuine Emergencies! You want to use this card for situations where you cannot pay cash or don’t have the necessary funds on a debit card, but is a necessary buy.  Note: Don’t use the card frivolously.  Studies have shown that patrons spend more money when using a credit card vs. cash because they don’t ‘feel’ the pinch in their wallet.
  • Be disciplined that you stay within your budget and continue saving. The reason most people get into typical consumer debt is due to buying ‘wants’ vs. what they actually need.  These are usually unbudgeted items.  A good use of the card example – E.G. You put $200 worth of gas in your vehicle that was budgeted that you would have paid cash for is ok.  A bad example would be purchasing the latest $1000 gizmo because everyone has it and you don’t want to feel left out !  This is DUMB and will get you in a world of hurt sooner than later.
  • Stay away from higher limits. They’ll come a time when you’ll be coaxed to take a higher limit.  Stick to your guns on this one and don’t give in.
  • Consider this Emergency Card part of your Financial Toolset. Remember the reason why you got this card in the first place, it should be a simple way of managing your wealth and used responsibly.

 

Do you have an emergency credit card or have feedback?  Make sure to let us know by commenting.  Also, please share this post if you feel it could help someone else.  Karma can be fun.

 

Resources Mentioned in this Post:

Personal Finance Books by Larry Winget

You’re Broke Because You Want to Be!

Shut Up, Stop Whining & Get a Life!
 

 

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Category: Debt Freedom, Personal Finance