Cash vs. Credit Card: Which is Better in an Emergency?

When there’s an emergency, you don’t always have a lot of time to react. In times of emergency, you’ll need access to money, whether that’s credit or cash. The question often arises, cash vs. credit card: Which is better in an emergency?! I have my thoughts, but I do think both have their place in emergency situations. Types of Emergency Preparedness

The Role of Cash in Emergencies

I’m a huge advocate for having cash in emergencies. However, it just seems to work out that you never have enough cash when you need it most. I would recommend keeping cash on hand just for emergencies. The role of cash in emergencies is priceless and you won’t understand that until you need it most.

Immediate Accessibility

Cash is universally accepted and readily accessible, making it a popular choice during emergencies. Whether it’s a power outage, natural disaster, or technical glitch that affects payment systems, having cash assures you that you can make purchases without relying on electronic transactions.

Due to the challenges of passing on a virus through the use of currency, some businesses now restrict the use of cash at their facilities. They also don’t want a lot of cash around due to the uptick in crime in certain areas.

Budgetary Control

Using cash for emergency expenses allows for better control. With physical currency, you will be able to SEE your spending limit, making it easier to manage your finances during stressful situations. When the cash is gone, that’s your signal to curb any further spending, unless you have no choice.

Cash Offers Privacy

Cash transactions offer a level of privacy that credit card transactions don’t provide. In some emergency situations, maintaining your privacy might be a concern. Using cash can help make sure that your personal information remains private. The 5 Basic Things You Need to Survive

There are all sorts of scams running right now where crooks are trying to hack into your computer and steal passwords and account numbers. Stay alert and approach any request for checking acount or other bank account or credit card information with caution. If you have any questions, reach out to your bank or credit card companies.

Cash Envelopes

Risks Involved

While cash has its perks, there are risks associated with relying solely on cash during emergencies.

• The amount of cash you have on hand may not be sufficient to meet all emergency expenses.
• If your cash is lost or stolen, there is no way to recover it. This can be a setback during already challenging times.
• Unlike credit card transactions that leave behind a digital trail, cash transactions lack accountability in most cases. This can make it difficult to track expenses or claim refunds for faulty products or services. If you like a paper trail, ask for receipts even when making purchases with cash.

The Advantages of Credit Cards in Emergencies

Instant Access to Funds

Credit cards provide instant access to funds during emergencies, offering an immediate solution for unexpected expenses. With a credit card, you don’t have to worry about the amount of cash you have on hand or whether ATMs are functioning. Of course, we must assume there is not a power outage. Why People Wait Until the Last Minute to Prep for Emergencies

Your Credit Card Does Have a Credit Limit

Your credit card does have a credit limit that’s usually established by your credit score or rating, how you’ve handled credit card debt and personal loan payments in the past, and even how you’ve paid on your mortgage. If you have good credit, you should qualify for a higher limit and possibly a lower rate. The key is not to let credit card debt get out of hand and to make it a habit to pay it off monthly if possible.

Credit cards usually have high interest rates as compared to other lines of credit. High-interest debt can prove to be a real burden if not handled properly. Most card companies don’t start charging their interest charges during the first 30 days for any individual charge, but once you’re into the next month they’ll accrue interest.

A few years ago I interviewed a few grocery store managers and asked what would happen if their power went out. The ones I talked to all had backup generators. But, here’s something I learned from one store. They were authorized to take debit cards, credit cards, and cash through the checkouts even if the power wasn’t working. They could take up to four thousand transactions during the workday without authorization on debit cards or credit cards. Interesting, right?

The best thing is to be prepared with food and water in your homes, rather than venturing out to a grocery store during or after a disaster.

Wider Acceptance

Credit cards are widely accepted by most merchants, making them a convenient payment option during emergencies. Whether you need to purchase groceries or pay for an unexpected medical bill, car repairs, home repair, or even some payments for your utilities, credit cards can be used in a variety of situations. What To Do If There’s No Gas in a Hurricane

Emergency Services and Assistance

In certain emergencies, such as medical emergencies or travel disruptions, credit cards often come with additional benefits. These may include emergency assistance services, trip cancellation insurance, car rental insurance, or access to roadside assistance, providing you with valuable support during challenging times. Be Prepared for a Hurricane + Free Printable Emergency Binder Contents

Record Keeping and Fraud Protection

One of the major advantages of credit cards is the ability to keep a record of transactions. This can prove important when managing your finances, during and after an emergency. Credit cards can also help provide fraud protection measures, offering peace of mind in case someone steals your credit card itself or gains access to your card number. Pros and Cons of a Human Proof Fence

Be aware that debit cards typically don’t provide the same protections, don’t always provide reimbursement for fraudulent charges, and take a longer time for reimbursement if they are approved.

What’s the happy medium between cash and a credit card?

A Balanced Approach

The ideal approach to handling emergencies is to have a decent balance between cash and credit cards. Using both cash and a card in an emergency is a good idea. Some credit card companies offer a lower “introductory APR” (annual percentage rate) when you open an account and make balance transfers from another card. You can also find cards where you earn points or rewards based on categories or size of purchases. Be careful with these cards since they may end up with a higher interest rate, a significant annual fee, transaction fees for excessive use, or put you into a variable APR that can go higher than you ever expect.

Emergency Fund

Having an emergency fund in cash is a practice all preppers should participate in and be part of your family’s emergency plan. This fund should be easily accessible and should be able to unexpected expenses that may arise during emergencies. How to Save the Most Money on Gas

As preppers, we often think of emergencies in the context of natural disasters only. In reality, many other things can cause us to go into emergency mode. That could include job loss, emergency swings in income if paid on commission, car accidents, or other medical situations.

Communication and Preparedness

Before an emergency occurs, it’s essential to communicate with your bank or credit card issuer to understand their emergency protocols. This may include setting up alerts, ensuring access to online banking, or having a backup card available. Communication Options for Your Family During a Disaster

Prioritize Safety

In any emergency situation, personal safety should always be the top priority. While cash and credit cards are crucial, they should never compromise your safety. Always do everything out of caution and make sure your family and yourself are safe. Is Your Neighborhood Prepared?

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Final Word

When it comes to emergencies, the choice between cash and credit cards is not a one-size-fits-all solution. Both options have their advantages and disadvantages. I would love to hear your opinions on cash vs. credit cards. Which one is your family more likely to use in an emergency? May God Bless this World, Linda

Copyright Images: Cash and Credit Cards AdobeStock_415223158 By Hanson,