Benjamin Currie, Author at Refresh Financial

We all know at least one person who has a credit card “for emergencies”, and it’s definitely an option when it comes to being prepared for the unexpected. So why do financial gurus and top thinkers all push the idea of an emergency fund? Why not use a credit card for unexpected expenses? There are several dangers of relying on credit cards for emergencies. We’ll list a few for you so you can see the dangers.

1. It’s not your money

Credit is not your money. You’re borrowing it. You wouldn’t rely on your parents or your best friend’s money for your own emergencies, so why would you rely on a faceless corporation’s money plus interest for the same thing?

2. You pay more than required

Because you are borrowing what you spend on your credit card, you are charged interest on your balance. That means that whatever your emergency is going to cost you, it will end up being even more expensive in the end.

3. You risk burying yourself in debt

If you’re dealing with your financial emergencies using your credit card, you’re turning your emergency into debt. If it’s a costly emergency, you could accumulate more debt than you’re able to handle in a very short period of time. It could be the first step on a path to financial ruin and the destruction of your own credit. Why risk turning one emergency into another?

4. It’ll be harder to cope if another emergency happens

Back-to-back emergencies can be a huge obstacle even if you have an emergency savings fund. If you’re only relying on your credit card, two emergencies could see you max out your card, destroy your credit and find yourself buried in debt. A savings fund would at least create some sort of buffer in case two emergencies happen fairly close to one another.

With an emergency savings account, you make interest on your balance. If you use a credit card, you pay interest on your balance. By using a credit card for your emergencies, you’re choosing to pay extra. It doesn’t make much logical sense, does it?

Your credit cards should not be on standby for an emergency. Instead, discipline yourself and save each month until you have substantial savings to cover unexpected expenses. Save your credit card for building your credit history and credit score.

Great Alternatives to Credit Cards For an Emergency Fund

Credit Building Programs

A credit building program, like Refresh Financial’s Cash Secured Loan, is a low-risk method of rebuilding your credit that requires no up-front cash and will report your on-time payments to the credit bureau just like an installment loan. This is an extremely easy and low-risk way to build credit and put away money for an emergency fund.

Secured Cards

A secured card is when you put money down to act as collateral for the credit you’ll be given on your card just like Refresh Financial’s Guaranteed Approval Visa Card. Not only will this card help you build your credit and report regularly to the credit bureau, but it can also be used in emergencies just like a regular credit card. The great thing about this option is you are using your own money instead of going into debt.


Refresh financial offers custom credit building solutions to help you build your credit score FAST.