Comments on: Using Credit Cards as an Emergency Fund: What?? http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what Mon, 21 May 2012 00:25:59 -0700 hourly 1 http://wordpress.org/?v=3.0.1 By: Mrs Money http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what/comment-page-1#comment-6093 Mrs Money Wed, 25 Feb 2009 20:49:57 +0000 http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what#comment-6093 Sue- I think responsible people can use some of their credit cards as emergency funds if they absolutely have to. After all, it's better to eat than to not have credit card debt because you don't have an emergency fund! ;) Sue- I think responsible people can use some of their credit cards as emergency funds if they absolutely have to. After all, it’s better to eat than to not have credit card debt because you don’t have an emergency fund! ;)

]]> By: Sue http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what/comment-page-1#comment-6072 Sue Wed, 25 Feb 2009 04:16:50 +0000 http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what#comment-6072 We had an emergency fund of $10,000 sitting in a short term deposit. Recently we paid it off our mortgage. Who knows whether our bank is going to survive or not at the moment? Rather pay it off the mortgage than risk losing it altogether. So our credit card is now our 'emergency fund' until we build up some savings again and see what happens to our bank. Not a good idea for those people who are careless about money, but certainly convenient at times. We had an emergency fund of $10,000 sitting in a short term deposit. Recently we paid it off our mortgage. Who knows whether our bank is going to survive or not at the moment? Rather pay it off the mortgage than risk losing it altogether.

So our credit card is now our ‘emergency fund’ until we build up some savings again and see what happens to our bank.

Not a good idea for those people who are careless about money, but certainly convenient at times.

]]> By: Credit Cards Today: Can you Get one? | The Ultimate Money Blog http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what/comment-page-1#comment-2738 Credit Cards Today: Can you Get one? | The Ultimate Money Blog Tue, 07 Oct 2008 23:23:33 +0000 http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what#comment-2738 [...] back, I wrote about how it’s a bad idea to use a credit card as an emergency fund. I’m standing by that today, and even more so now that the credit crisis is in full swing. I [...] [...] back, I wrote about how it’s a bad idea to use a credit card as an emergency fund. I’m standing by that today, and even more so now that the credit crisis is in full swing. I [...]

]]> By: Mrs Money http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what/comment-page-1#comment-549 Mrs Money Thu, 19 Jun 2008 21:15:44 +0000 http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what#comment-549 Grant- for that example, it makes sense. I didn't sit down and do the math. I guess personally I feel that I'd rather have the cash available to pay for emergencies, but that's just me. I think people should do whatever works best for them, but definitely not use a credit card as their emergency fund instead of saving if they can. Thanks for your point of view! :) Grant- for that example, it makes sense. I didn’t sit down and do the math. I guess personally I feel that I’d rather have the cash available to pay for emergencies, but that’s just me. I think people should do whatever works best for them, but definitely not use a credit card as their emergency fund instead of saving if they can. Thanks for your point of view! :)

]]> By: Grant http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what/comment-page-1#comment-544 Grant Thu, 19 Jun 2008 02:13:06 +0000 http://ultimatemoneyblog.com/using-credit-cards-as-an-emergency-fund-what#comment-544 I see it both ways. While having the liquidity of an emergency fund can definitely be comforting, from a pure financial perspective it can make sense for the right person. For example, even if you are paying 9% on a credit card with a $10,000 balance, you would be paying $900 a year in interest. At the same time if you had $10,000 in a savings account earning 3% (which you probably won't find in todays market), you would earn $300 in interest a year. So by paying off the cards you would be saving $600 a year, and if times got hard you could technically just charge the cards again. Again I am not saying this would be the best case for every person, but for some people it might make sense. I see it both ways. While having the liquidity of an emergency fund can definitely be comforting, from a pure financial perspective it can make sense for the right person.

For example, even if you are paying 9% on a credit card with a $10,000 balance, you would be paying $900 a year in interest.
At the same time if you had $10,000 in a savings account earning 3% (which you probably won’t find in todays market), you would earn $300 in interest a year. So by paying off the cards you would be saving $600 a year, and if times got hard you could technically just charge the cards again.

Again I am not saying this would be the best case for every person, but for some people it might make sense.

]]>