Credit cards

Best Credit Cards for Emergency Spending

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If a misfortune occurs — like a layoff, a high medical bill, or an urgent car repair — it’s natural to want to lean on whatever you can to get through it, and that can include credit cards.

Using credit cards for emergencies is unsustainable in the long run, but the truth is that sometimes in life you may need to put an emergency expense on a credit card. And you can avoid making a bad situation worse by choosing the right credit card.

Pro tip

If you’re using a credit card in an emergency, have a plan to pay off the balance as quickly as possible to avoid interest charges.

You can also start building an emergency fund now, regardless of the circumstances, to minimize the likelihood of having to use a credit card again in an emergency, even if it’s as little as $5. $ per week. Having something in reserve can mean the difference between overcoming short-term financial difficulties and going into debt.

If you don’t have an emergency fund to fall back on, we’ve picked out a few credit cards that won’t charge you interest for a long introductory period and don’t have annual fees. Read on to learn more about the risks of using credit cards in an emergency and the importance of having an emergency fund.

The Risks of Using Credit Cards in an Emergency

1. You borrow money

When you use a credit card, whether for an emergency or not, the money you spend becomes credit card debt that you will eventually have to pay off. If you don’t pay the balance in full at the end of each billing period, or aren’t able to repay it later, you could find yourself in crippling debt.

2. The interest rate is high

You will have to pay interest to the credit card issuer if you carry this balance. The majority of credit cards charge double-digit interest rates, usually between 10% and 25%, which makes it even harder to pay back over time.

3. There may be a temptation to overspend

Making a big purchase (or multiple purchases) with a credit card, even in an emergency, can build momentum that leads to more debt than you can afford to pay off.

4. Your credit score may be affected

If you reach or approach the card’s credit limit, your credit score will likely suffer. This is because you have significantly increased your credit utilization ratio, or the amount you owe relative to your credit limit, which is typically 30% of your credit score. Your credit score is fixable, but a lower number could make it harder or more expensive to access credit in the future.

5. It might be harder to build an emergency fund

It becomes even more difficult to build up and maintain an emergency fund if you have a high balance on a credit card. Any extra funds you have will likely be used to pay off your credit card rather than an emergency fund.

How an emergency fund can save you from having to use cards

Create an emergency fund now to help you overcome your financial difficulties in the future without going into debt by using credit cards or taking out loans, even if your contributions are small at first. Putting a few dollars into your emergency fund each week will begin to add up. For example, if you set aside $5 every week, it will become $120 in six months.

You can try to free up some cash by adjusting your budget or lowering the cost of some of your bills. Selling goods can make you a quick buck, and a side hustle can be a longer-term solution to having an extra stream of income. Once you have a small nest egg, make a longer-term savings plan and set incremental goals to save three to six months of expenses.

Yet for some, building an emergency fund can be difficult when every dollar is spent on essential living expenses. According to Federal Reserve data, nearly 40% of Americans would be unable to cover an unexpected expense of $400 in cash or its equivalent, and black and Hispanic Americans are even less able to handle an unexpected financial setback than white Americans. .

If you need to use a credit card in an emergency, it’s best to rely on a new credit card with an introductory APR of 0% on purchases and no annual fee — like our picks for the best credit cards. 0% credit. These cards generally require a good credit score of 670 or higher, but if you qualify, you can avoid paying interest for up to 18 months. Look for credit cards with lower APRs in general that you can use instantly upon approval; it can be useful to have instant access to a credit card that hasn’t arrived in the mail yet if you’re dealing with an emergency.

Best credit cards for emergencies

Relying on a credit card is not an ideal safety net for emergencies, but it can be useful to keep one in a drawer for this possibility. Some credit cards are better used for emergencies than others — here are the ones we recommend:

American Bank Visa Platinum

You won’t earn any rewards with US Bank Visa Platinum, but for paying off debt or waiving interest on new purchases, this card is hard to beat. This card is NextAdvisor’s top choice for 0% interest on new purchases as well as balance transfers due to its introductory period of 20 billing cycles (14.49 – 24.49% interest variable later). If you want an extended 0% interest cushion in an emergency, consider adding this card to your wallet.

  • Introductory offer:

    N / A

  • Annual subscription :

    $0

  • Regular APR:

    16.24% – 26.24% (Variable)

  • Recommended credit:

    670-850 (good to excellent)

  • Learn more external link icon On the secure site of our partner
  • Introductory offer:
    Earn 1.5% Extra Cash Back
  • Annual subscription :

    $0

  • Regular APR:

    16.49% – 25.24% variable

  • Recommended credit:

    670-850 (good to excellent)

  • Apply now external link icon On Chase’s secure site
  • Introductory offer:
  • Annual subscription :

    $0

  • Regular APR:

    16.49% – 25.24% variable

  • Recommended credit:

    670-850 (good to excellent)

  • Apply now external link icon On Chase’s secure site

Amex EveryDay® Credit Card

The Amex EveryDay credit card is a winner on several fronts; it has an introductory APR of 0% on new purchases that lasts for 15 months, no annual fees, rewards for purchases – and you can use it instantly upon approval. The Amex EveryDay credit card gives you 1 point per dollar spent on most purchases and 2 points per dollar on the first $6,000 spent each year in US supermarkets. You will be subject to a variable APR of 12.99% to 23.99% after the introductory period ends.

Citi® Dual Charge Card

The Citi Double Cash Card has a simple and straightforward approach to rewards, which encourages its customers to pay off their balance. You’ll earn 2% cash back on every purchase: 1% when you purchase and 1% when you refund it. This card can also help you manage existing debt, with its long 18-month 0% introductory rate for balance transfers (15.49% – 25.49% variable APR thereafter). The simple rewards structure and attractive interest-free balance transfer period make this a versatile card for emergencies.

Hunt Unlimited Freedom®

The Chase Freedom Unlimited stands out for its impressive rewards, flexibility, and no annual fees. You’ll earn 5% cash back on Chase travel purchases through Chase Ultimate Rewards®, 3% cash back on restaurant and drug store purchases, and 1.5% cash back on everything else. But the value of the card goes beyond its rewards. Earn an extra 1.5% cash back on everything you buy (up to $20,000 spent in the first year), an introductory 15-month interest-free period on purchases and balance transfers (then a variable APR from 16.49% to 25.24%) and introduced a balance transfer fee of $5 or 3% of the amount of each transfer, whichever is greater during the first 60 days. Plus, the ability to redeem points at a higher value through Chase Ultimate Rewards® portal make this one of the best cash back cards.

Hunting Freedom Flex

The Chase Freedom Flex is very similar to the Chase Freedom Unlimited in terms of value. It offers the same introductory APR offer, no annual fee, and many of the same rewards. The two biggest differences are the rewards structure and the card benefits. With the Freedom Flex, you’ll earn an additional 5% back on up to $1,500 spent on combined purchases in bonus categories that rotate each quarter you activate (then 1% back) and 1% back on all regular expenses. And because the Chase Freedom Flex is a Mastercard, it offers a range of World Elite Mastercard benefits that the Freedom Unlimited does not.