Rewards credit cards
In some cases, having an emergency fund doesn't always negate the need -- or utility -- of an emergency credit card. Credit cards are far more convenient in an emergency than trying to withdraw money from a savings account. If you already have an emergency fund and simply want a credit card on hand for peace of mind, a rewards credit card can be a good option.
READ MORE: Best Rewards Credit Cards
Since emergencies are rarely inexpensive, any way you can get a little bit back can be worthwhile. For example, some of the best cash back rewards cards offer 2% cash back on purchases. This could take a little of the sting out of a pricey car repair or unexpected medical bill.
You can also find rewards cards with extra perks that can come in handy in an emergency. A credit card concierge may help you find important services, like car repair shops, while away from home. You could also take advantage of your existing points or miles to save money on last-minute travel or car rentals.
RELATED: How Do Credit Card Points Work?
Medical credit cards
You can find a few credit cards specifically designed to help people pay for medical expenses. These cards often have low interest rates and no annual fee. Some may even have special financing offers that let you make payments over time. Just watch out for deferred interest (see the section on deferred interest below).
READ MORE: Best Medical Credit Cards
A few medical credit cards will require you to have good credit. However, others may have more flexible credit requirements. This can make them useful alternatives for people with fair or even bad credit.
READ MORE: Credit Cards for Bad Credit
Keep in mind medical credit cards can typically only be used for medical expenses. This makes them of limited use as general emergency credit cards. You may also want to explore low interest credit cards as an all-purpose alternative.
READ MORE: Best Low Interest Credit Cards
Things to consider when using a credit card for emergencies
Credit cards are convenient in emergencies, but they're not without their downsides. Here are a few things to consider before using your credit card to finance emergency expenses.
Your credit limit
One big concern when covering large emergency bills is your card's credit limit. For one thing, you need to consider if your card's credit limit is large enough for the expenses at hand. While some high limit credit cards can have limits of $10,000 or more, these are the exception, not the rule.
Not only can going over your credit limit cause problems, but even getting near your limit can have negative consequences. That's because it will increase your credit utilization rate. This is the ratio of your credit card balance and available credit. A high utilization rate can cause your credit score to decrease. In some cases, it may even cause your issuer to reduce your credit limit.
LEARN MORE: What Is a Credit Utilization Ratio?
If you need a higher credit card limit, you may have options. For instance, you can request a higher credit limit from your issuer. This may require a credit check and meeting basic credit history and income requirements.
LEARN MORE: How to Increase Your Credit Limit
Deferred interest
Although we talked about the benefits of intro APR offers above, there's another kind of zero-interest offer you may encounter: deferred interest offers. While they can seem similar on the surface, financing offers that use deferred interest can be expensive if you're not careful.
With a regular intro APR offer, you aren't charged any interest for the length of the introductory period. Once that ends, your remaining balance starts accruing interest at the standard rate.
LEARN MORE: How Does Credit Card Interest Work?
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