5 Times Cash Rewards Credit Cards Come in Handy

emergency credit card

Life is one big unpredictable journey, and when the unexpected happens it often comes with surprise expenses. Utilizing a credit card with cash rewards during emergencies can help you get through tough times and buy you time to pay off costs you didn’t plan for, and even reap a cash back reward.

So the next time an emergency strikes, have no fear. Smart use of a credit card cash reward can ease you through the storm and help you avoid predatory payday loans that will only raise your costs. Here’s how to make the most of your cash back card when an emergency strikes.

Related: When to Use Your Emergency Savings Fund

5 Best Cash Back Credit Cards to Use for Emergencies

With a cash back card, you’ll get a percentage of the money you spend with that card back, typically paid to you by the credit card issuer as a credit to your account’s balance. Cash back rates are variable, but usually range from about 1 to 5 percent and with some cards you can even choose which purchase categories earn rewards. Many cards also come with a 0-percent introductory interest rate to start, which is even better if you end up charging emergencies to the card.

Be wary, though, of overspending. If your card is for emergencies only, make sure the situation at hand is a true emergency and that using your cash rewards card is your best or only option. Then budget and plan to pay off your balance as soon as possible after the emergency situation has passed to avoid paying more in interest charges, or they could quickly catch up to any cash rewards you received.

Everyone’s definition of an emergency is different, and it can be tricky to know if a situation truly warrants the use of an emergency credit card. Other times it’s clearer, like in these five situations outlined below. In these circumstances, a credit card with cash rewards can help save the day.

Read: 4 Ways Real People Used Their Emergency Fund

1. Medical crisis involving you, a family member or a pet

From a car crash to an unexpected appendectomy, your health status or that of loved ones can change at any moment. Or an animal friend might need a surgery or emergency procedure when cash is tight. Medical emergencies can be the most frightening and urgent scares in life, and can also carry some of the highest bills that could justify the use of a cash rewards card.

While rewards specific to medical expenses are rare, the BankAmericard Cash Rewards credit card offers 1 percent cash back on all purchases, anytime. If you happen to also use the card to shop at the grocery store, you can earn 2 percent in cash back, and for fuel purchases, earn 3 percent cash back (up to $1,500 total grocery and gas purchases per quarter). Enjoy no annual fee and an introductory rate of 0 percent APR for 12 months, then interest rates on this card range from 12.99% APR to 22.99% percent, depending on your personal credit score.

2. Urgent vehicle care and emergency repairs

When the transmission goes out and you still need to get around, you don’t have much time to debate the repair. You have work, school or other places to go now, so the repair costs you can’t pay for will probably need to be charged.

The U.S. Bank Cash+ Visa Signature Credit Card allows cardholders to earn up to 5 percent cash back on two categories of their choice (up to $2,000 in combined purchases each quarter), 2 percent back on one everyday  purchase like gas or groceries, and 1 percent back on all other purchases. With the relevant categories selected you can earn 2 percent cash back on gas and 5 percent cash back on car rentals while your car is in the shop. The rate is 12.99% APR to 23.99% APR depending on your credit score, and there is no annual fee.

Related: When to Stop Pouring Money into Repairing Your Car

3. Homeowner nightmares that have to be fixed pronto

The hot water tank dies after 20 years, a pipe bursts, or the dishwasher takes a nosedive: as a homeowner, you can find yourself suddenly facing an expensive repair or appliance replacement, and a cash rewards card can help you get some of those costs back.

The Chase Freedom credit card offers 5 percent cash back on up to $1,500 in purchases made each quarter in certain categories or at certain stores. Now through June, cardholders get 5 percent back at Bed, Bath & Beyond and Overstock.com, which both offer a variety of home goods and appliances. On all other purchases, users earn 1 percent cash back, plus there’s a  $100 bonus when you spend $500 in the first three months. There is no annual fee and an introductory 0% APR for the first 15 billing cycles, which then will revert to the standard rate range of 13.99% APR to 22.99% APR.

4. Emergencies requiring immediate travel

Family emergencies happen and you might not always live around the corner. Maybe there’s been a medical emergency and your sister needs someone to watch her kids, starting tonight, or you have to attend a funeral. Last-minute travel by plane, rental car or cross-country train is never cheap, but the Capital One Quicksilver Rewards credit card can help curb a bit of the costs. This cash rewards card provides unlimited 1.5 percent cash back on every purchase you make. It has no annual fee and a 0% APR until January 2016, when a rate between 12.90% APR and 22.90% APR will be assessed and applied based on the cardholders’ creditworthiness. Or you can try a travel rewards card to earn miles to cover flight costs or rack up points to cover travel costs.

5. An unexpected loss or theft

You didn’t think it will happen to you until it does: Someone broke into your vehicle after work and stole your laptop, or you left you smartphone on top of your car and it flew off somewhere along the freeway. Now you’re in a pinch and need a new device immediately. Consider the Citi Double® Cash Card. Cardholders earn cash back twice on every purchase they make. This means 1 percent cash back when a purchase is made. Then another 1 percent cash back is earned once the purchase is paid for. Intro rates start at 0 percent APR and vary depending on your credit rating.

  • FraserSt

    If you’ve got an upcoming lump-sum payment that you can plan for, you can also use the reward calculator at CreditCardTuneUp. com to find cards that would pay you the most in rewards (including the bonus) for your expected spending.

    Note that many rewards cards have introductory 0% APRs for like a year as well. So that can give you the time to pay back the expense, not incur interest, and earn some rewards at the same time.