How To Use A Credit Card Loan During An Emergency

Understanding credit card loans can be invaluable in a financial emergency. They provide access to emergency funds during a crisis, proving to be a financial lifeline. Credit card issuers offer loans on a credit card, giving you flexible options for managing unexpected expenses. 

You can use these loans to cover urgent medical bills, manage periods of disrupted income or address other immediate needs such as car repairs, or other unforeseen costs. Thus, you get immediate access to funds without needing to liquidate other assets. 

However, it’s important to follow certain dos and don’ts to minimise the financial strain afterwards.

Advantages of Credit Card Loans

A credit card can serve as a valuable safety net during emergencies. A key access to advantage of credit card loans. They provide quick funds without extra paperwork since they’re pre-approved.

Other advantages include:

• Quick access to emergency funds as other assets require time to liquidate 

• It’s an affordable option, as such loans usually come with an interest-free period of up to 90 days
• You can avoid interest charges by paying your bills in full within the billing cycle
• The loan amount will be directly transferred to your bank account, which you can use according to your convenience
• It lets you repay emergency funds in instalments, but manage repayments responsibly to avoid debt 
• Most credit cards have high limits, providing flexibility during costly emergencies

Key Facts about Credit Card Loans 

If you’re considering applying for one, be well informed and proceed with caution. Having all the information on hand can help you make the most of this facility. 

• You can receive instant access to the loan amount after requesting it either by phone or online
• You can access the loan amount anytime and from anywhere, regardless of your location
• You can check the detailed information on all costs, including late payment penalties and interest rates, by reading the terms and conditions
• Manage your liabilities wisely by paying the EMIs on time
• Stick to your credit utilisation ratio by aiming to use no more than 30% of your credit limit including the loan 
• Avoid overspending, as exceeding this threshold can negatively impact your credit score

What to Consider During an Emergency

When using a credit card, it is vital to follow certain rules that are the key to good financial health. These include watching how much you use your card and paying bills on time. However, during an emergency, it may be necessary to prioritise certain basic guidelines:

• Contact your bank to request a credit limit increase
• Utilise your reward points and cashback smartly
• Convert your reward points to cash, even if it means accepting a lower conversion rate 
• Use your credit card to cover essential expenses during emergencies, but have a backup plan to pay off your credit card bills quickly
• In case of debt accumulation, consider using a balance transfer credit card to consolidate payments

Rules to Follow to Avoid Debt Accumulation

It is easy to take a loan and then struggle to repay it. To avoid this, put the following into action:

• Identify your emergency expenses before using your credit card; then, create a budget for these costs and avoid unnecessary purchases
• Regularly monitor and review your expenses to manage your budget effectively
• Manage your spending and make adjustments as needed; this will make it easier for you to repay the amount
• Track your expenses periodically to ensure all the charges are correct
• Don’t use the credit card’s cash advance facility; withdrawing money from an ATM incurs high interest and extra fees, making it more expensive than other credit options

Emergencies can strike unexpectedly. By leveraging credit card loans wisely, you can navigate financial crises more effectively while keeping your long-term financial health in check. Another way to ensure your financial well-being is choosing the right card. 

To boost your safety and get instant access to a range of deals, apply for a credit card after comparing the various options available in the market. The  One Credit Card is an excellent choice to help you get quick credit and ensure you never miss a bill’s due date.

The One Credit Card App puts you in control, helping you monitor your transactions and set spending limits. You can also get a loan right from the app via the OneCash facility to meet urgent needs with ease. 

What’s more, this lifetime-free card doesn’t come with any joining fees, annual fees or hidden charges. You can also get 5X reward points in your two highest spending categories each month and get deals from brands like Croma, LG, Zomato and more. Apply now for the One Credit Card and give it a try.