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Can Credit Cards Help You During Emergencies?
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Unexpected situations tend to show up without warning and sometimes when there’s little time to plan or prepare. A sudden medical bill, an urgent travel need, or even a temporary cash shortfall can put pressure on your finances. Having access to a reliable source of funds at such moments can help ease the stress and allow you to focus on resolving the issue at hand.
That’s where a credit card becomes more than just a payment tool. It steps in as a flexible, ready-to-use line of credit that you can turn to instantly. However, before relying on your card in an emergency, it helps to know what it can do and what it cannot.
Let’s look at the different ways in which credit cards can support you during critical times along with the factors to keep in mind.
Why should you use them in emergencies?
When you need immediate access to money, a credit card allows you to spend first and settle later. That ability becomes vital when time is of the essence.
1. Instant access
You don’t have to wait for approvals, paperwork, or formalities. Your available credit limit is already active. If a hospital demands a deposit, or your car breaks down out of town, swiping your card can get things moving immediately.
2. Widely accepted
From medical centres and pharmacies to travel bookings and roadside repairs, most emergency-related vendors accept credit cards. This means you're unlikely to face resistance when making critical payments.
3. Cash withdrawals (if necessary)
You can use your credit card to withdraw cash through ATMs, but it is only preferable as a last resort. Cash withdrawals from credit cards incur additional charges and interest.
Interest free window
One of the least understood yet most helpful credit card features is the interest-free grace period. It usually extends up to 48 days from the date of transaction—depending on your billing cycle.
If your emergency expense is followed by an expected income like salary or an insurance reimbursement, you can repay within this window and avoid interest altogether. This makes the card an efficient short-term cushion and helps you manage without disrupting long-term savings or breaking fixed deposits.
Even if repayment in full isn't feasible, many issuers allow you to convert the outstanding amount into manageable EMIs. Some even offer the option to apply for a personal loan on your credit card, which comes with pre-approved limits and easy disbursal.
Why is preparation important?
A credit card can only help you in a crisis if it’s already part of your financial toolkit. Many people realise this too late when they try to apply for one during an emergency.
There’s also something to be said about the emotional relief of knowing you have a backup. Even if you don’t end up using your card, its presence offers a sense of preparedness.
Things to keep in mind before using a credit card in a crisis
While they offer flexibility, misusing them can lead to financial stress. A thoughtful approach is key.
1. Reviewing your billing cycle
Understanding when your next bill is due allows you to plan repayments strategically. A purchase made just after the cycle begins gives you the longest interest-free window.
2. Avoid minimum payments unless necessary
It might be tempting to pay only the minimum due, but this leads to interest on the remaining balance. If full repayment isn't possible, consider converting it into EMIs instead.
3. Do not max out your card
Keeping your utilisation low not only helps during emergencies but also protects your credit score. A high utilisation ratio can affect future loan approvals and credit limit enhancements.
4. Know your card’s benefits
Some come with added emergency-related perks like hospital cash benefits, roadside assistance, or card-blocking through customer service in case of theft. Familiarity with these features helps during pressure situations.
Emergencies often test not just your ability to react but the strength of the financial decisions you’ve made in advance. Using a credit card responsibly can make all the difference between disruption and control.
Kotak Mahindra Bank enables users to apply for a credit card online and manage card-related services digitally making it easier to prepare for tomorrow and today. The key lies not just in owning a card but in using it with awareness and purpose.
By building these habits now, you can turn your credit card into a reliable tool, ready to support you whenever life throws the unexpected your way.
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