<img height="1" width="1" style="display:none;" alt="" src="https://dc.ads.linkedin.com/collect/?pid=319290&amp;fmt=gif">
Find a Financial Professional Subscribe to Blog


Emergencies aren’t fun and they are even worse if you don’t have an emergency fund saved. In today’s tough times, many people have either blown through their emergency fund or just weren’t able to save one. 

That doesn’t mean that emergencies won’t happen, though. So, what are you to do? 

You’ve heard credit card debt is bad and who wants to put themselves further into debt, right? While it’s not ideal, a credit card can bail you out in an emergency. 

Here’s what you need to know to keep it from putting you further into debt. 

Try to get a 0% APR Credit Card 

First, see if you qualify for a credit card with a 0% APR. You typically need great credit to qualify, so if you know you have a credit score over 700, don’t be afraid to apply. 

Keep in mind, 0% APR credit cards only last for a certain amount of time. Some have a 0% APR for 6 months and some longer. If you can pay off the amount you charged within that time period, you’ll never pay interest and it’s like you had an emergency fund all along. 

If you can’t, just know that interest will accrue on the first day after the introductory period so it’s important to pay the balance down as far as you can. 

Use a Low-Interest Credit Card as a Backup 

If you don’t qualify for a 0% APR credit card, choose the credit card with the lowest APR to use as your emergency fund. 

If you don’t have a credit card yet and need to apply for one, look for a card with the lowest APR possible if you have time before you’ll need the funds. It can take a couple of weeks to actually receive the card, so already having a low-interest credit card in your possession is the best option. 

Because the card will accrue interest from day one, make sure you only use the card for a true emergency and that you create a plan to pay it off. 

Negotiate a Lower Interest Rate 

If you don’t have a credit card with a low-interest rate, consider asking your existing credit card company for a lower rate. Don’t feel intimidated to call your credit card company. What’s the worst they could say? 

It helps if you have an on-time payment history and used your credit card wisely. The better your history is with the credit card company the more likely they are to accept your offer and lower your interest rate.  

If they say ‘no,’ you can always look around for a competing credit card offer that might give you the lower rate you need. 

Use any Accumulated Rewards 

If you have a rewards credit card and you have unused rewards, you may be able to use them during your emergency. 

Even if you have $50 – $100, take it as a statement credit. Every little bit you can pay your balance down fast, the less interest you’ll pay. If your credit card pays rewards in gift cards, find a gift card you could use to get you through the emergency. 

For example, if you lost your job, a gift card to a grocery store or Target could likely come in handy as it will help you get food or household needs without dipping into your checkbook. 

Create a Debt Payoff Plan 

If you have to rack up a lot of credit card debt, such as to cover a hospital bill or damages from a car accident, create a debt payoff plan. 

Unless you lost your job and don’t have regular income coming in, you should be able to set up a feasible debt payoff plan. 

If you only racked up debt on one credit card, that should be your main focus. Make sure you at least make the minimum payment each month, but it’s better if you can pay extra toward the debt each month. 

Look at your budget and see how much money you can free up to pay the debt down. Even if it’s only a couple hundred dollars a month, you’ll knock the balance down and pay less interest. 

It may also help to set up a timeframe. Let’s say you had to charge $2,000 and you want it paid off in 6 months. You’d need to pay $333 a month to reach your goal. Sometimes it helps to break it down to see that you could pay the debt off in a short time. If you look at $2,000 in debt that could feel overwhelming, but $333 a month sounds a lot more feasible. 

Alternatives to a Credit Card in an Emergency 

If you don’t have an emergency fund, a credit card isn’t the only answer. In fact, it should be the last resort just because of the high-interest rates most of them charge. If you can grab a 0% APR credit card, go for it. If not, here are some other ways to get through the emergency. 

Ask Friends or Family to Help 

Don’t underestimate other people’s desire to help. If you are in a bind, your friends and family may be able to give you or loan you the money. Even if it’s a loan, chances are it will cost you a lot less than it would if you borrowed on a credit card. 

If it’s a loan agreement, just get the details in writing. This way there aren’t any hurt feelings or arguments down the road when it comes time to pay the loan back. 

Start a Second Job or Side Hustle 

The sky’s the limit when it comes to making money today. If you need to make extra money to get through an emergency, think about how you can bring more money in. 

You can work a second job at a local retail shop, or you can start a side hustle. Today there are many side hustles such as driving for Uber or Lyft, delivering food for UberEATS or DoorDash, or shopping for Instacart. 

You could even start something on your own. Think about what you’re good at and see how you could offer those services to your community or online. Whether you write, design websites, make crafty items, or teach classes, there are ways to offer these services as a freelancer online on sites like Fiverr or Upwork and get paid. 

Ask for a Payment Arrangement 

If you’re having a medical emergency or even a house emergency, you might be able to work out a payment arrangement with the entity charging you. 

Today especially, most places offer payment plans that allow you to break down your total due into monthly payments. You might have to agree to automatic payments, or you might pay a small service fee to get the plan, but it’s better than paying credit card interest. 

How to Save for an Emergency Fund 

It’s important that you also know how to save for an emergency fund. Whether you’ve just experienced an emergency and depleted your funds, or you had to use a credit card to cover the emergency, there’s always time to save an emergency fund again. 

Here’s how. 

Cut Back on Expenses 

It might feel impossible right now with inflation so high but try to cut back on expenses as much as possible. Even if you can save a couple hundred dollars a month, it can help you offset the cost of a future emergency. 

Dedicate Side Hustle Funds to your Emergency Fund 

If you take on a side hustle, consider allocating all the funds you make from it to your emergency fund. This ensures you always have money available for an emergency, even if it starts out with only a small amount. 

Ask for a Raise 

If you’re due for a raise at work, consider asking for it. If you get it, allocate the extra income to your emergency fund rather than increasing the money you spend. 

Invest your Money 

Leaving your money in a savings account won’t help it grow. Instead, consider investing in conservative investments that allow your money to grow. Compound earnings are a great way to grow your emergency savings fast. 

Key Takeaway 

While you shouldn’t rely on credit cards, especially for emergencies, they can be a good backup if you don’t have an emergency fund or run out of funds. Just make sure you’re careful about paying the card off and about saving an emergency fund for the future. 

This article is provided by EveryIncome.

Learn more about financial planning from a financial service professional—try out our one-of-a-kind Find an Advisor tool.