Using a credit card for emergencies – such as paying for costs surrounding an illness – could add anxiety to an already strenuous situation. If a credit card is absolutely necessary, consider a low-interest card best suited for your credit. But the best option might be to seek financial counseling.
Dear Cashing In,
I’m looking for a credit card to use for emergencies with no interest and no annual fee. I’ve never had a credit card, but my husband has been sick, and we have been traveling a few times a year out of our city to doctors’ appointments. I don’t want to choose the wrong one and end up paying more than I have to. We live payday to payday. – Chrystal
The best way to answer this is to not only look at your question in its narrow scope of what credit card is best for your situation, but to also look at the larger issue of personal finance advice and how it applies to your circumstances.
See related: 5 reasons not to put medical bills on credit cards
Best advice: Don’t get a credit card
Perhaps the best credit card advice anybody can give is to avoid credit card debt at all costs. Interest rates on credit cards can feel punishing. They are high – annual rates are almost always in the double-digits and usually more than 15 percent. According to CreditCards.com’s most recent rate survey, average card APRs are nearly 18 percent.
About a decade ago, Congress mandated that credit card statements include the date the credit card would be paid off if the customer made only the minimum payment required. When that rule first went into effect, some people were shocked at how long it would take to pay off their credit card debt. The payoff date was usually years, if not decades, away.
The point is that once you take on credit card debt, it can be difficult to recover financially – especially if you are living paycheck-to-paycheck and have little expectation of being able to pay off your debt quickly. For that reason, the best move you can make is to avoid putting charges on a credit card you know you can’t immediately pay back.
If you must get a card, find one with a low APR
It sounds as though you feel there are few other options. If that’s the case, you’ll want to minimize the damage to your finances by finding a low-interest credit card. If you have never had a credit card before, and you have little experience with credit, you will probably find that a lot of the low-interest options are closed to you. Many of them are for people with very good to excellent credit.
Don’t worry about rewards, but rather search for a card with low interest rates. If your credit is poor, your interest rates will be higher. Without knowing about your credit, it is hard to recommend any particular card.
CreditCards.com has a variety of search functions that might point you in the right direction. Search for low-interest cards that are aimed at people who are building their credit. You can also use the CardMatch tool to see your pre-qualified matches.
Consider financial counseling
In your circumstance, though, the best advice – other than avoiding card debt altogether – might be to seek financial counseling.
Often, people wait to seek financial advice until their problems become too big of a burden to reasonably overcome. If you see yourself headed toward a troubled financial future because of expenses related to your husband’s illness, it might be better to seek that financial wisdom sooner rather than later. A qualified counselor might help you identify options other than applying for a credit card and putting expenses on it.
Check out local nonprofits that offer financial counseling for free. Or look into GreenPath Financial Wellness, a national nonprofit that can steer you to local resources. Another good resource is the National Foundation for Credit Counseling.
Good luck to you!