Credit Cards have become a basic need for everyone these days due to the financial stability they provide. Other than providing you with a credit limit, credit cards can also help you save a lot if you use them responsibly. Not only this but having a credit card can be really beneficial in emergency situations. However, there are some rules that you need to follow with credit cards in order to maintain a good credit score, but no rules are more important than an emergency or an unavoidable situation. Following are the emergency situations when you can use your credit cards without worrying about your credit score:
1. When You Need Instant Cash
If you are outside and in urgent need of cash, you can use your credit card to withdraw cash as the cash advance facility is provided by all the credit card issuers. There are a lot of things that can only be done using cash as many merchants, shopkeepers, public transports, etc, don’t accept online payment. In such situations, you can withdraw money using your credit card if you are running out of cash. However, it is generally not advisable to withdraw cash with a credit card as you are charged a cash advance fee for the same and there is no interest-free period for such transactions. But when it is urgent and you need only cash to make an important purchase, you can go with this. Just remember that you can only withdraw cash up to the cash advance limit of your credit card, which is a certain percentage of your total credit limit.
2. In Case of Medical Emergency
If any of your family members have met an accident or they are in a serious health condition ad you are running out of funds, you can use your credit card and make all the payments and medicine purchases using it. You might need to use more than 30% of your credit limit, which can hurt your credit score, but your credit score is obviously not more important than someone’s life. You can build your credit score again by making payments on time. This is how a credit card can be a lifesaver in medical emergencies.
3. Instant Personal Loan
Most of the card issuers provide a personal loan against credit cards. So, if you are in urgent need of funds for any reason, you can apply for an instant personal loan which will be provided by your card issuer on the basis of your past payment behavior. So, you need not worry if you need funds for a family function or your friends planned a sudden trip, you can just apply for an instant personal loan against your credit card and that’s it.
4. Convert Big Purchases Into EMIs
Sometimes it becomes necessary to make some big purchases and you have to make them using your credit card as you can’t afford to pay that much amount all at once. In such cases, you should not worry about how you will pay your credit card bill next month as you can simply convert your big purchases or your credit card bill into EMIs and then pay a small part of the total bill amount every month. It is a really convenient facility provided by the card issuers as it makes it easy for you to make big purchases without having a burden of the bill payment. You will be charged a processing fee, interest charges, etc for the same but all this will be worth it when you use the card for urgent requirements.
5. For making International Transactions
If you are traveling overseas and forgot/lost the required foreign exchange, you can use your credit card for making international transactions. To avail of this facility, you will have to make sure that the foreign currency transactions option has been enabled by you. If not, you can do the same using internet banking. However, you will be charged a foreign currency transaction fee (generally 3.5%) for the same, but you can use the facility in emergency situations. Most credit card issuers also allow you to withdraw cash in foreign currency via an ATM.
There can be situations when you have to use your credit card without following any rules as required to maintain a good credit score and you must do that when it’s urgent. Credit cards can help you a lot in emergencies but make sure to achieve your financial stability after that as not making the payments on time can not only hurt your credit score but will also make to stuck under unmanageable debt. Whenever you spend a big amount on your credit card and find yourself unable to repay that all at once, you can convert your bill into EMI so that avoid extra charges.
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