Can Your Credit Card Help in An Emergency?
The credit card, as we see it, is a wonderful treasure. It is optimized to suit you at your time of need, as experts and financial gurus say. However, is it more of a bane? Most people keep credit cards for times of unwarranted emergencies. However, in the long run, they can cause more problems than they actually solve.
You Are Paying More
In the long run, you actually end up paying more than you actually bargained for. Since the money that you have used to get you out of the emergency is not yours, you will be expected to pay an interest on it. Furthermore, the price of the interest depends on your already existing credit score. If your credit score is less than 620, then you might have to shell out much more than you would have otherwise paid.
Decreases Your Credit Score
Oftentimes, emergency purchases come back to back. With a credit card, you would only be able to see yourself through a single emergency without maxing out your card, decreasing your score in one swoop, and plummeting yourself in debt.
Instead of relying on a credit card to see you through emergencies, open a savings account. Discipline yourself enough to save a fair amount every month, in case something untoward happens. Thus, in case of emergencies, you can utilize your own funds, and not rely on the money of a giant corporation. This will also help keep you credit score at the top for a long time.