You can use credit cards to tide over the emergency until you are able to arrange funds. But credit cards should not be seen as a replacement for setting up an emergency fund as the interest rates charged are extremely high and paying back can become a huge challenge leading to bad financial decisions on your part.
- Moreover, you might not be able to use the credit card during your emergencies due to several factors such as :
- Couple of EMIs might be already tied to it.
- There might be instances where the credit amount is exhausted
- The credit amount has to be paid back to the bank immediately. Interest charges in case the amount is not fully paid back is extremely high.
- Your credit card limit might not be enough to take care of your emergency needs.