Lacking a Nail

Credit cards are part of our emergency fund. This is one of the big ways our household deviates from Dave Ramsey. One of his biggest tenets is no credit cards, for the most part he’s anti-loan. A mortgage is the only real exception. When we were doing our debt free journey we closed our credit cards. It removed the temptation of using them. We were also trying to go all in.

One of the driving forces to paying off our credit cards as soon as charge hits the account is because we utilize them.

Firstly, they’re a stopgap. If we have a large expense, even if we have the cash for it, we’ll use the credit card. Then we transfer the precise amount from the applicable savings account.

Secondly, we have cash back rewards tied to the credit card accounts. So we get a token amount back for each purchase.

Thirdly, they count as our emergency fund. A last resort portion of the emergency fund. We have credit cards at different banking institutions. We work on requesting limit increases to increase their contribution to the emergency fund amount. We have a goal of the credit card limits matching the emergency fund savings account.

Looking at the cards as an extension of the emergency fund does help us keep spending under control. After all, you never know when an emergency will happen.

P.S. If this was useful my one-page Sinking Funds Tracker is in the shop, or you can tip on Ko-fi or PayPal. One tiny move is progress.

This post reflects my personal experience and opinions. I share our real-life money – rounded numbers, personal choices, (tiny) next steps. It is not financial advice. I’m not a financial advisor. Budgeting and money topics are shared for education and entertainment only. Your situation is unique; verify details before acting. Small steps count.

Personal experiences only—this isn’t professional advice. See Disclosures and Terms.