Back to Basics – More On Credit Cards
In this series on the basics of your money and how to manage it we’ve talked about the importance of a rainy day fund and how exactly credit cards work. This week we’re combining those two topics to talk about a question our coaches get pretty often. “Why do I need an emergency fund if I have a credit card?”
It’s a fair question. After all, a rainy day fund is there for surprise expenses that always seem to pop up. And if you need $400 for a new washing machine because yours unexpectedly quit working what’s the difference between paying for that with your credit card and paying for it with cash from your rainy day fund?
It turns out, maybe a lot of money. For the whole story on why using a credit card isn’t as good as a rainy day fund we’ve got a short explainer here.