Credit Cards for Emergencies? NO!

One of the arguments for keeping credit cards (that I hear often) is for use in emergencies.  “What will you do if you have an emergency?  You’ll need a credit card then!”  Well, yesterday in hall of the science building I saw a T-shirt that sums up perfectly why most people SHOULDN’T keep a credit card “for emergencies.”  The shirt said:

“I know the CREDIT CARD is for emergencies, but she was HOT!”

It didn’t have a logo, or anything to identify it with any company, which means the 18 or 19 year old male wearing it probably got it in the mall.  I’m sure he thought it was just a funny t-shirt, but I also have to wonder just how true that saying is for him?

It might have been funny to me, also…if I didn’t know so many guys who would actually DO that.  Between being in college and spending six years in the army, I can rattle off at least twenty names of guys I have known who would do this.  This is without even stopping to actually think. 

Speaking in sweeping generalizations, single college age and military guys tend to be very impulsive when it comes to dating and money management.  That is why they are preferred targets for the credit card companies!  This isn’t a conspiracy theory; it’s their business plan.  Student credit card accounts have a higher interest rate than even “bad credit” accounts: 17.88% for a student credit card versus 12.81% “for bad credit” credit card according to (rate information is at the bottom right of the information block, you have to scroll down to find it).  College students may be smart, but they aren’t yet wise and are often prone to impulsive buying.  Just about anything can become an emergency, or a “need.”

Now I’ll admit I am a hardliner on this: I don’t think ANYONE should have credit cards!  Cash in the bank makes a perfectly good emergency fund, and that is what I do myself now.  Cash makes you stop and think, “Is this really an emergency?”  Cash is real money, not some imaginary number they tell you that you can spend.  Cash is not nearly as easy to spend as a credit card when you’re three beers into a Friday night and some “hot” girl walks into the bar.  Cash is also flashier than a credit card in that same bar if you are intent on impressing a girl.  And finally, cash just feels better than a credit limit :)