While it can be useful in times of need, using credit cards as an emergency fund is not the right way to be prepared for the unexpected.
Dallas, TX (PRWEB) September 16, 2013
“Emergency Credit Cards? Not Such A Good Idea.”
That is the title of the article that was published in September 2013 on the website of Credit Card Consolidation Loan. It basically discusses why the debt relief company believes that this is not the smartest way that consumers can prepare for emergency situations.
The article states how they think credit cards can be a double edged sword. It can help an individual when it comes to boosting their credit score. However, when it is not used properly and carefully, it can lead to the financial ruin of the consumer.
Credit Card Consolidation Loan urges consumers to learn how to use their credit cards the right way so that they do not have to eliminate it completely for fear of debt. One of the ways that financial experts say credit cards should be used is in emergencies. The article states that while it can be useful in times of need, using credit cards as an emergency fund is not the right way to be prepared for the unexpected.
Here are three reasons why emergency credit cards should not be a main source of reserve funds.
1. Consumers will be charged with high interest rate. The credit card company will not really care how consumers use their cards. All purchases made from it will be charged with high interest. If the consumer is unable to pay the full debt, it can end up being in their billing statement for a very long time. The article believes that is a waste of money because of the interest amount that will be paid along the way.
2. Consumers will not look for a better solution. The convenience will make the consumer complacent which will keep them from looking for better ways to pay for the emergency situation. They will skip looking for benefits and other aid that could have saved them some money.
3. Consumers will not strictly use it for emergencies. The article thinks that, again, the convenience of the emergency credit card will keep consumers from thoroughly thinking about how to use it. The article states that cash is more difficult to spend so consumers are usually more cautious about how they spend it. The same is not true for credit cards.
In the end, the article states that the consumer must prioritize building up a cash reserve fund. Although emergency credit cards will still be useful for unexpected events that require a huge amount of money, it should only be the backup plan in case the cash reserve is not enough.
In case the consumer wants to use the credit card, it must be for an amount that they can afford to pay in full immediately. That way, the balance will not incur any interest.
To read the whole article, visit the website of Credit Card Consolidation Loan or click on this link: http://creditcardconsolidationloan.org/emergency-credit-cards-not-such-a-good-idea/.