Do this before using your credit card to pay for emergency expenses

Receiving a huge surprise bill is no fun. If you don’t have any money saved, the first thing you should do is use a credit card to pay off your bills. But before you rush to swipe your credit cards, there’s another option you should explore to help you get out of a difficult financial situation without going into credit card debt.

Avoid interest charges when you swipe your credit card

Some credit card companies offer 0% APR credit cards.. This card charges 0% interest for a limited introductory period. Some allow cardholders to avoid interest on new purchases, while others allow cardholders to avoid interest on eligible balance transfers.

If you need to pay for a large, unexpected purchase and don’t have enough money in your emergency fund to cover it, consider using a card like this. If you pay your balance before the end of your first 0% APR period, no interest will be charged.

How to Benefit from a 0% APR Credit Card

Before getting a 0% APR credit card, review the offer terms and card details. This will help you choose a card that meets your expectations. Understanding how long the promotional period lasts can also help you plan to repay your debt.

Here’s an example of how you can use a 0% APR credit card to pay for emergency expenses without racking up debt. Imagine opening a credit card that offers an introductory 0% APR on purchases for 15 months. You use your card to pay $3,000 in expenses. To avoid debt, you must pay off your balance in full before the promotional period ends. You can do this by paying $200 per month for the next 15 months, which is more manageable than paying $3,000 up front.

Credit card debt is becoming a growing problem

You may be wondering why you shouldn’t use the credit cards you already have to cover emergency expenses. If you are unable to pay the balance in full when your statement arrives, your credit card issuer will charge you additional interest. Most credit cards have high interest rates, and some offer variable interest rates of up to 29.99%, so these fees can add up quickly.

Motley Fool Ascent highlighted credit card debt statistics and found that it is becoming a growing problem for Americans. As of 2023, the average American had $6,501 in credit card debt.

The longer it takes to repay high-interest debt, the faster your account balance increases. It’s important to do what you can to avoid interest charges. Paying your account balance in full each month is the best strategy to avoid costly interest fees.

You can prepare for emergency costs before they occur.

Using a 0% APR credit card for emergency spending is a great strategy to avoid debt if you don’t have savings. But you can prepare financially before an emergency arises. One way is to have a solid emergency fund. Even if you can only afford to set aside $50 a month, it will make a difference and your money will grow over time.

Consider keeping your emergency fund in a high-yield savings account so it can earn interest while the cash is in the bank. If you have trouble remembering to save, you can use automation. Setting up automatic transfers from your checking account to your savings account is easy and can help you stay on track while you continue to reach your goals.

Saving money before a big life change or emergency can help you get out of debt. But if you have costly bills to pay but don’t have money to save, consider a 0% APR credit card.

NOTE: Our top-tier cashback cards now offer a 0% introductory APR through 2025.

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