During times of emergencies, credit cards can be an invaluable lifeline to help you settle any urgent expenses. For example, in months when you’re short on budget, or perhaps, if an income you’re expecting gets delayed, you can use your credit card to settle outstanding bills and other financial obligations in the meantime.
You can even use your credit card rewards to save money on essentials, allowing you to redirect those funds to your emergency expenses instead. The Landers Cashback Everywhere Credit Card, for instance, gives you up to 5% cashback at Landers, 2% on dining spends, and 1% on all other qualified transactions.* These generous cashback rewards can give your finances some breathing space during emergency situations while still allowing you to purchase daily necessities such as groceries.
Another convenient way that you can use your Landers Cashback Everywhere Credit Card for emergencies is through credit card cash advance transactions. A cash advance allows you to withdraw a portion of your card’s credit limit as cash via an ATM. It is essentially a short-term loan that can be used for emergencies and other immediate financial needs. Do keep in mind that cash advances incur different interest fees compared to regular credit card purchases. Hence, it’s a must to always go over your card’s terms first to be aware of those fees and make the repayment plan as smooth as possible.
That being said, irresponsible use of credit cards during emergencies can have the opposite effect. Rather than help you out, you may inadvertently find yourself in long-term debt instead. To avoid putting yourself in such a situation, here are some pointers on how to use your credit card responsibly during times of emergency.
1. Set Clear Boundaries for Emergency Use
Before an emergency situation even arises, it’s crucial for you to define first what exactly qualifies as an emergency. This will help prevent you from trying to justify unnecessary expenses as emergencies in moments of heightened emotions. For instance, an unexpected hospital admission counts as an emergency as it concerns your health. On the other hand, buying a new TV because there’s an ongoing flash sale is not.
To make these boundaries more definite, take the time to write down potential emergency scenarios so you’ll have a handy list to refer to when you think of using your credit card during a financial crisis. By sticking to the guidelines you’ve set, you can keep your credit limit available for truly essential situations.
2. Use Only What You Can Afford to Repay
It can be tempting to swipe your credit card liberally during emergencies, but keep in mind that you’ll have to repay all those eventually. Before reaching for your credit card, consider first how the expense will fit into your budget come repayment time. Ideally, you’ll want to use only what you can pay off within the next billing cycle or a few months to prevent interest charges from piling up. By keeping your charges manageable, you’ll be able to avoid accumulating excessive debt.
In addition, you can use the spending limits feature of your card to keep your spending on track. Your Landers Cashback Everywhere Credit Card lets you do so conveniently via the Maya app, along with blocking certain transaction types such as online purchases or foreign transactions, to help you stick only to using your card for emergency expenses.
3. Prioritize Cards with Low Interest Rates
If you happen to have multiple credit cards, then use the one with the lowest interest rate for your emergency expenses. This will allow you to minimize interest charges in dire cases when you can’t make your monthly payment. Lower interest reduces the total cost of borrowing, allowing you to recover financially much faster.
4. Use Cash Advances Wisely
As mentioned earlier, a credit card cash advance can be a lifesaver during emergencies as it gives you quick access to funds. Despite this convenience, however, make sure you’re only taking out cash a advance if the situation really calls for it. Using cash advances for unnecessary expenses can lead to increasing interest charges and even long-term debt.
Try to keep the amount of your cash advance to a minimum as well. Not only does this keep interest charges low, it also ensures that a substantial portion of your credit limit can still be available for other urgent needs you may have.
5. Monitor Your Spending Closely
Emergencies often involve multiple expenses, which can quickly add up. By keeping close track of your spending, you’ll ensure that you won’t go over your emergency budget or go over your credit limit, which can incur over-limit fees.
Fortunately, you can easily monitor any transactions you’ve made with your Landers Cashback Everywhere Credit Card through the Maya app, making it easier to review your emergency expenses. Regular expense tracking prevents surprises and helps you remain in control of your finances.
6. Plan for Repayment Immediately
Once the emergency has passed, it’s crucial to focus on repaying the debt as quickly as possible. Interest charges can accumulate rapidly, so adjusting your budget to make payments on time allows you to keep your debt manageable and prevent it from snowballing into a larger debt that’ll take you longer to pay off.
With discipline and proper planning, you can use your credit card in times of emergency to cover immediate needs without incurring long-term debt. The next time you find yourself in a financial crisis, keep the tips above in mind to ensure that you can navigate through the tough times without jeopardizing your financial future.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.
