*Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
This article was last updated Oct 09, 2017, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
Throughout September there will be activities across the country to promote emergency preparedness. More than 3,000 groups including national, regional, and local public and private organizations are supporting National Preparedness Month by encouraging all Americans to be proactive in the event of an emergency.
Money Matters in an Emergency
Two of the top five reasons people declare bankruptcy is due to medical expenses, job loss and unexpected expenses. Emergencies happen and can occur suddenly. Although the government does offer some relief efforts and support, depending on the severity of the emergency (usually a natural disaster), they don’t offer funding for individual emergencies.
An urgent need for extra funds could arise because of a natural disaster, car accident, power failure, a tree crashing through the roof of your home, or the breakdown of a major appliance. Being financially prepared if something were to happen can at least relieve you of an additional hardship.
Credit also helps in emergency situations. You may need a credit card to check into a hotel for a few nights, rent a power generator or vehicle, or pay for hospital and emergency bills. No matter what the issue happens to be, immediate access to funds can really help you solve problems in a hurry and potentially relieve you of an additional hardship.
It’s a good idea to have at least one credit card with a relatively large credit limit on reserve for emergencies. By emergency I don’t mean the shoe sale you didn’t anticipate, but instead the kinds of events that could totally throw your life out whack or even result in you or your loved ones being in harm’s way.
Set aside an emergency credit card and use it only often enough to keep the account active. Many card issuers will close an account due to inactivity, so be sure to make a few purchases for items you already buy and pay that off right away to avoid paying interest and to make sure you maintain a high line of available credit.
In order to get a cash advance from your credit card, you may need a PIN to withdraw the funds from an ATM machine. Set that up now because after an emergency strikes the banks may be closed if it’s after hours, the weekend or holidays. It’s also wise to stash some money in a safe, but accessible place. The same spot you would store things like your passport(s), insurance policies, will and testament, and other important documents.
Widespread Purchasing Power & Benefits
Make sure your emergency plastic is a widely-used and accepted brand of credit card. Trying to use a Diners’ Club card at your local 24-hour pharmacy might not work. Similarly, although many merchants accept American Express there are a many more merchants that accept Visa and MasterCard worldwide.
You should also consider an emergency credit card that has both a traditional magnetic strip and a chip for PIN-and-chip use. That will ensure acceptance at the broadest range of merchants, even ones that are overseas who no longer accept cards with a magnetized strip on the back.
While you’re at it, try to open an account with a company that offers additional features and benefits that will give you added peace of mind and flexibility in an emergency. There are many programs that provide added benefits like free or discounted car rental insurance, trip cancellation coverage, travel insurance, and concierge service to help you book travel and lodging reservations or send help if your vehicle breaks down. See what benefits the Visa Signature Program and the World MasterCard Program have to offer.
The 4 P’s
A helpful rule to remember in the event of an emergency are the “4 Ps” (Prior Planning Prevents Problems). Don’t procrastinate. Have a solid plan in place and ready to deploy. Every household should have a supply of fresh water, food (including pet food), medical supplies, and medicines.
An emergency kit should also include a weather radio, an alternative cooking source such as a camp stove, multiple flashlights, batteries, and candles, and other similar supplies to help you “rough it” without safety risks or too much inconvenience and discomfort.
During an emergency, the local Emergency Management or Emergency Services office in your community will give you information on such things as where to find shelters, and which evacuation routes to follow.
Check out Ready.gov for community and state information to learn about resources in your area. FEMA and the Red Cross are also great go-to agencies with online resources and tips.