What emergency credit card options do I have during coronavirus?

As the coronavirus spreads throughout the US and businesses temporarily shutter, it can be very difficult to keep up with finances. If you’re among those facing mild to severe financial difficulties, know that you are not alone and that you have options. Here are some ways you can keep your finances stable with credit cards during these uncertain times.

Riding out a lack of income

Service industries have been hit particularly hard during this outbreak, with several states temporarily closing bars, restaurants and similar businesses. If you’re a service worker affected by these closings, you’ll need to float your finances for at least a few weeks until you can return to your job. There are a few helpful emergency credit cards to consider: 0% intro APR credit cards for purchases, instant approval cards and cards for fair credit.

Credit cards are designed as tools, not emergency funding

During normal times, it’s never a good idea to use a credit card to fill financial gaps. Credit cards are a financial tool to help you build credit and can reward you for responsible spending habits. You should only apply for and use credit cards as backup funds during emergencies when you have few other financial options.

If you take out a credit card for emergency purposes, make sure you have both a short-term and long-term plan. You should not use a credit card and then put it to the side to deal with the consequences later. To avoid hurting your financial health, make sure you have a repayment plan in place for the card after the emergency passes. After all is said and done, you don’t want to end up in an even worse financial situation because you failed to make adequate payments.

Read below to see the types of cards that can help you in an emergency, and how to use them.

Intro purchase APR credit cards

A credit card with an intro period on purchases can let you use your card without interest for a set period of time. Since we’re unsure how long these business closures will last, you’ll want a card with a long an intro period.

On average, these cards will stave off interest for 12 months, though some can go even longer. The U.S. Bank Visa® Platinum Credit Card, for example, offers a 20 billing cycles intro period on purchases.

Instant approval credit cards

You might find that you need a credit card faster than the seven to 10 business days it typically takes for approval – and the seven to 14 days it then takes for delivery. If so, there are a few banks that will give you your card’s account information upon approval. These include American Express, Apple, Bank of America, Brex, and USAA.

Once approved, you can copy your card information and use it to make digital and online purchases right away.

Easy-to-obtain credit cards for fair credit

Not everyone will have equal access to the full range of credit cards out there. If you don’t have a credit score or have a history of poor to fair credit, a credit card designed for your credit range could have a high APRs and low credit limits. In some cases, it might not be worth applying for these cards if your spending is going to far outstrip your given credit limit.

Compared to high-end cards, it’s relatively easy to obtain cards for fair credit. While you won’t necessarily get the best rates or rewards with these cards, they’re still a step above credit cards designed for poor credit.

Are secured credit cards helpful during an emergency?

No. Secured cards won’t keep you afloat financially since they require a security deposit which acts as the card’s credit limit.

I can pay for the essentials, but can’t cover my credit card bills

If making rent and grocery payments isn’t a problem, but you don’t think you can make your outstanding credit card payments, emergency credit cards can help here too. Specifically, you’ll want to look at available balance transfer cards.

Intro balance transfer APR credit cards

With a balance transfer card, you can move your existing card debt over to a card that doesn’t charge interest for a set period of time. This means you can move your existing card payments off the table while you focus on taking care of yourself.

Intro periods on balance transfer cards average around 15 months, but some can go even longer. The Citi® Diamond Preferred® Card is one of the current frontrunners when it comes to length, with an intro period of 18 months on balance transfers.

Mind your intro period

For balance transfer and purchase intro APRs, do your best to pay off your entire balance before that promotional period ends. Otherwise, you may get hit with retroactive interest on your balance which could put you in bad financial shape.

To avoid overspending and a balance you can’t afford, use your card only for absolute essentials.

How do I choose an emergency credit card?

Given the uncertain nature of the coronavirus response, we recommend erring on the side of caution and prioritizing a card with the longest intro APR period on purchases or balance transfers. These include cards such as the Citi Simplicity, U.S. Bank Visa® Platinum Credit Card and HSBC Gold Mastercard® credit card.

If your primary concern is stabilizing your finances now, factors such as card rewards and perks may not weigh into your decision as heavily. Also note that you aren’t obligated to use the card after your intro period ends, so it might be helpful to choose a card without an annual fee to avoid increasing your financial burden.

Get a cash advance at your own risk

A cash advance almost always ends up costing you in the long run thanks to cash advance fees and interest. We advise getting a cash advance only when you need cash and have no other option. A pandemic may qualify for such a scenario, but if you can help it you should use your credit card or savings for purchases in place of a cash advance.

Compare credit cards with introductory APRs

Bottom line

The right credit card can serve as a useful crutch as you deal with the short term effects of coronavirus on our economy. Using a credit card this way isn’t sustainable over the long term however, and you’ll eventually need to pay down your balance. Take care to use your emergency credit card wisely and don’t fall behind on payments.