I was asked to think about what the phrase ‘In case of emergency’ means to me in terms of using credit cards or getting out a loan. Now, I’ve got to admit, I don’t actually have a credit card at the moment, its part of my frugal living initiative. However, I’m not adverse to their use and I used to have one, I’m just trying to live without being in debt at the moment. On reflection not having a credit card is really challenging and actually quite stupid because I don’t have a safety net. Its this safety net that a credit card can give you that does offer peace of mind and its been quite stressful having nothing to fall back on.
Before children I had a credit card and for me an emergency was when I saw something I really liked on sale at a bargain price. For example a new handbag from Liberty or (in one case I remember) a new set of bedlinen which we still use. For me, with no family ties and nothing to spend my money on these were emergencies.
Nowadays things are very different. With three children to feed and maintain there have been times when I would have found it easier to use credit cards for an emergency or to do something like pay the car insurance in one go- oddly enough paying it as a lump sum and then paying the balance off over three months is still cheaper than paying the extra for monthly direct debits. In terms of emergencies, we recently had to have quite a lot of unexpected work done on the car- around £900 in one go- and the ability to pay this over a couple of months we would have been quite handy. I think I may get one for emergencies.