Don't Use Credit Cards for Emergency Funds

[Suba]

For some people, saving for an emergency fund can be very difficult, and most don't have savings or an emergency fund. Therefore, if something unexpected happens, such as home/vehicle repairs, hospital bills, etc., they tend to use credit cards.

Financial experts advise against relying on credit cards (it's better to save an emergency fund), for the following reasons:
1. Credit cards are a form of loan and carry interest and late fees.
2. Not all people/stores accept credit cards.
3. You may lose access to credit from other platforms if your credit card has been fully used.
4. Credit cards that are kept (inactive) for a certain period of time are often closed by the issuer.

 

[Fire&Rain]

Many people underestimate how quickly unexpected expenses can pile up. Having an emergency fund, even if it’s just a small one, gives real peace of mind. Credit cards are helpful for short term needs, but relying on them all the time only creates more debt and stress later.

 

[Augusta]

Yes as credit card balances can accrue fee or interest, which will cost you more in the long run.

 

[eLdavis]

Using your credit card is as equal fo taking a loan, and you will have to pay back. Over here, very few people have access to credit cards.

 

[kit_hung]

Using your credit card is as equal fo taking a loan, and you will have to pay back. Over here, very few people have access to credit cards.

It is true that using a credit card is like taking out a loan because you have to pay it back and often with interest too. In many places, access to credit cards is very limited. People rely on cash or mobile money services. This makes credit cards seem like a luxury to a few. But the principle is the same. When you use them, you must know that it is not your money, it is a debt and if you fail to pay it, it will cause you stress and greater debts than you expected.