What’s an Emergency? When to Use a Credit Card

Many people obtain a credit card with the idea that they will only use it for emergency purposes. While there’s nothing wrong with this, it does lead to an important question: what constitutes an emergency?

There is no right or wrong answer to this question, as it’s based largely on your personal situation, finances, and views on the world.

Here are five potential emergencies that may call for the use of a credit card:

1. Car Repair

Your vehicle may fail you when you least expect it. Unless the repair is covered by warranty, you’ll have no choice but to pay out of pocket.

While some repairs cost $100 or less, others are much more expensive. For example, a new transmission could set you back $1,000 or so.

You hope your car never breaks down, but you should always realize it’s a possibility.

2. Home Repair

Just the same as your vehicle, something could go wrong with your home. This includes but is not limited to a roof leak, cracked foundation, mold issues, and a broken appliance.

If you can’t tackle the repair on your own, it’s time to hire a professional. Depending on the project, you could find yourself with a bill for several thousand dollars (such as if you need a new roof).

3. Medical Expenses

There is never a good time to find that you have a medical concern that requires immediate attention.

Even if you have health insurance, you could still be stuck with bills for hundreds or thousands of dollars.

If you don’t have the cash in the bank to cover these expenses, it’s time to consider the use of a credit card.

Tip: you may be able to negotiate the cost of your bill as a means of saving some money.

4. A Loved One Needs Help

There may come a time when a family member or close friend comes to you for financial assistance.

For example, maybe a sibling is going through a rough patch and is facing an expensive car repair.

It’s not always an easy decision to make, but using a credit card to help out a loved one may be something you do at some point.

5. Unemployment

If you find yourself out of work and facing mounting expenses, a credit card may be just what you need to buy some time until you land a new job.

You don’t want to rely solely on your credit card, but it may be able to provide a bit of relief here and there.

Have you ever used a credit card for any of these emergencies?


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