Do I need a CC for emergencies???

[dizneefamily5]

Ok, I know you experts can help me here. We have paid off all of our credit cards and I think I made a mistake. I closed all the credit cards because I didn't want to ever use them again. Now I am thinking we need one for emergencies. We do not have a fully funded emergency fund yet. We have a very large 401K which doesn't help in this area, though. Can you recommend a good card for us to get that will never (hopefully) have a balance? Or should we just go without?? HELP!!

 

[lisajl]

Hello Cincinnati!! Delaware ohio here...

I have a CC for emergencies and it has a small balance now, but we are paying it off! Hooray! I think it is nice to have one for emergencies if you can control your spending. That was my problem in the past. Now, all I can think about is how much it will really cost if I carry a balance. Or, do I really need that?

My account has a 9.9% APR. My DH's through his credit union is 9.8%, we paid his off two months ago. Nice feeling!!
BTW, we don't have a fully funded emergency fund but we are working on it.
It will take us awhile because we are trying to pay of my card, but it will not be used again unless for an emergency.
Good luck!

Lisa

 

[twinklebug]

I think everyone needs one for emergencies, even if just to rent a car (most agencies won't take visa/mc debit cards). Make sure there are no acceptance, annual or other fees & the APR is as low as you can go. I know bankrate.com lists many cards, it might be a good starting point.

 

[clh2]

I also agree that you need one for emergencies. What if you:

• 
  need to get your car towed
  need to make a hotel reservation that requires a CC # to hold the reservation
  your dog gets really sick and
  or any of the many EMERGENCIES that you can't predict
  your well pump has a problem and the well pump people need to come over

you get the drift. We get to meet the well pump guy tomorrow. I can hardly wait to see what that is going to cost.

 

[gonemousin']

First of all...CONGRATS on paying off your debt!!! A wonderful feeling, isn't it?!

As for the credit card. Since you don't have your emergency fund fully funded just yet, maybe you should hang onto that credit card (tuck it FAR FAR away) until you reach that point. Since you've come this far and worked hard to pay off all your debt, you've probably already changed your mindset/habits about using credit cards, so you can probably trust yourself to use it ONLY for a significant emergency. (since you probably have your $1K emergency fund, right?) Once you're fully funded, you should never need those credit cards again. Good luck to you!!

 

[ktglads]

Just because you have a credit card doesn't mean you need to use it. I just find it much more convenient to have a credit card when on vacation or for emergencies. How many times have you heard of people being double or triple charged at hotels, restaurants, etc? That ties up the funds in your checking account until it is straightened out which could cause other problems like bounced checks, etc. With the websites available for credit cards, you can treat it like a debit card and pay it as soon as you use it. Some places limit you to 4 payments a month but others allow unlimited payments which would mean you get the benefits like rental car insurance without having to worry about interest payments or messing up your checking account

 

[ceecee]

I would not feel comfortable without a CC, you do need an emergency fund set up and you may want to consider getting a CC if you can go without using it. My girlfriend had serious CC debt, finally got a second mortgage (home equity as they are now called) and paid them off. Kept one for emergency and all of a sudden she's complaining that she owes $3000.00 on it again. Sports fees, etc. things I would not consider an emergency. I have heard of some people freezing them in water so they couldn't get to them quickly!
Just remember you are now debt free and you don't want to go back. Congrats and good luck.

 

[Chicago526]

Yes, even if you had a fully funded emergency account, I'd say you should still have a CC. It's usefull for travel and emergencies where whoever you have to pay doesn't take checks. You can just charge the emergency and then take money out of the emergency fund to pay it off right away. I'd actually go so far as to say you should carry it on you, as you could be away from home when the emergency happens. It doesn't do you any good if it's in a block of ice in your freezer at home when you're stuck on an expressway trying to get a tow truck! The trick is, of course, to only use it for an emergency, and a great shoe sale isn't an emergency!

Also, if you have the disapline to pay it off each month in full to avoid interest, rewards CC's are a great way to earn points just by buying the things you buy anyway. DH and I rack up between 1500 and 3000 airline miles a month just by buying groceries, gasoline, home improvement stuff, all those every day charges. We've earned many free tickets and first class upgrades this way! There are many differant programs, you can earn just about anything, from cash back to free hotel nights to free airline tickets to free gift cards and merchandise.

 

[dizneefamily5]

Okay, you've convinced me that we do need a credit card for emergencies. I like the idea of the credit union. I think I'll start there. Any other recommendations for good cards?? Our credit is okay - not great. Getting better now, though

 

[disneysteve]

I happen to think everyone should have a credit card and learn to use it properly to get the maximum benefit. We charged nearly $32,000 last year and earned about $600 in free rewards and didn't pay a penny in interest or penalties. We are spending 10 nights in New Hampshire in August for free with our Marriott Reward points, for example.

As for which card to get, keep in mind that the interest rate is totally irrelevant as long as you pay the balance in full each month. Doesn't matter if it is 1%, 11% or 21%.

So find a good rewards card that has a reward that is of value to you: cashback, hotel points, airline miles, store discounts, whatever works for you. Just be sure to pay the bill in full and on time each and every month and you'll be fine.