Why Should you Use a Cashback Credit Card for Emergencies?

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During normal circumstances, one would be advised to have an emergency credit card that is free of all those additional jazzy perks and privileges that also comes with an annual percentage rate that is low. You also need to have in hand an emergency fund that is solid alongside, of course. However, it might seem a tad more practical to also have an emergency card just as a backup.

Well, the current times are nothing like stable normal times. Many of the people living on salary cuts or unemployment benefits because of the Coronavirus (COVID-19) pandemic, so it is time to adjust some of the emergency credit card rules.

If you are someone who is facing a monetary crisis, you can consider using your cashback credit card as your official card for emergencies. In many scenarios, you might just get a 0% introductory APR on the purchases on your cashback credit card, which can stretch up to a period of 12 to 21 months. That will be like getting a loan that is interest-free for almost a year.

Which is the Best Cashback Credit Card?

Just to make it clear before we proceed any further, there is no definite answer to this question. A credit card link' href='https://www.policybazaar.ae/top-5-cashback-credit-cards-in-the-uae-ccart/'>cashback credit card does not come under the ‘one size fits all’ category. The best cashback credit card might not be the best-suited card for your relative and vice versa.

To find the card that is the best suited for you and your requirements, you need to sit down and analyze your spending patterns. No, this does not mean learning some software and being tech-savvy, it simply means reviewing your items line by line in your budget so that you are aware of where you spend most of your hard-earned money on your life’s essentials.

Some of the best options for a cashback credit card in the market offer cardholders a flat rate for the rewards earned on the loyalty program offered. Some of the cards offer a flat rate for all spending categories, which can be a good option if you do not wish to keep a track of the various different spending categories.

Some cards also offer cashback that is capped up to a certain amount on different spending categories that rotate on a periodic basis. These spending categories tend to cover all the various different categories. Some might also offer a fixed cashback on all other purchases.

The rotating rewards offered by the various different options of cashback credit card also tend to reflect the current interest of the various customers. This helps them in offering discounts on categories that cardholders are likely to spend it. For instance, offering a discount on streaming services during these times is a good option as many of the people out there are opting for such services. However, some cards might require you to put in a little more effort by signing up every period for availing these bonuses.

With the wide variety of credit card providers and rising competition, there is a cashback credit card out there for everyone that can help towards saving as much money as possible during these difficult times. Additionally, if you use your cashback credit card for emergencies, you tend to receive some reward value for all the money that you spend.

Should You Pay An Annual Membership Fee?

Well, the answer to this question depends on the person. Many people are spending a long of money on buying groceries, while some might be cooking to attain greater health, others might be trying to isolate themselves or save some money during these difficult times brought by the Coronavirus pandemic.

If you consider a scenario wherein there is a card that offers lesser rewards with no annual fee or a scenario wherein you have a card that charges an annual fee but also offers great rewards – the choice depends on your needs. Just one key rule to keep in mind is that the rewards on your cashback credit card must outweigh the cost on your card.

Additional Perks on a Cashback Credit Card

Many of the options for a cashback credit card in the market offer great and huge bonuses on sign-up. In most cases, one needs to spend a fixed amount in a fixed period of time in order to be eligible to earn the welcome bonus. If you use your cashback credit card for your daily spends, it will not be a tough task to reach the fixed spending limit in the fixed time frame.

Another benefit of using your emergency cashback credit card often is that, otherwise, some of the credit card providers might close down accounts that reflect some sort of irregular activity. Especially during these unstable times, many credit cardholders are going through these experiences as the card providers do not really wish to extend too much credit during these times, so you should keep this in mind.

Warning! If You Do Not Have a Good Credit Score, Then...

If you are holding a good credit Score, you can manage to get a decent APR on your cashback credit card. However, such cards often have ranges for the APR, for people with different credit scores. If you end up on the higher end of the range, it is good for you to avoid putting any large spends on the cashback credit card unless you are sure you can pay them off every month, or during the introductory APR period.

Carrying a balance on your cashback credit card will result in debt piling up really quickly. If you are in such a scenario, it is good for you to consider other financing alternatives in the market that will offer you a comparatively low-interest rate that is better than the APR on your card.

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