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Wednesday, August 3, 2011

Where's My Emergency Fund? On my Credit Card!

No, don't worry. I'm not counting on credit cards to fund emergencies. But I was rather nervous about expenses for my long sojourn in France, which extended over two credit card bills. So--since my emergency fund isn't earning anything to speak of--I overpaid my credit cards, both of them.

As it happened, we spent a lot less than anticipated. So when I got my credit card bills, I found a big, fat credit. My emergency fund, however, is a bit on the meager side.

I'm not worried, since we are due for paychecks at the end of the month. If my emergency funds were earning the 5-10% I can remember from not all that along ago, I would think twice about overfunding. But the dangers of NOT paying a credit card bill are known to all: huge fees, interest payments on all your new charges, and so on.

Do you have any tricks like this for when you're on the move and might not be able to pay your bills?

5 comments:

Kay said...

We set up online bill payments when we are away for the bill we have on hand with future due date and pre-pay a few bills that we know are the same every month.

Other than that, I'm afraid, no tricks that we know of.

the Frugal Ecologist said...

Hi - I am a new reader. I too set up automatic online payments. Even when traveling I still log in to check on accounts etc. Even if cash is earning practically no interest, I hate to give anything extra to credit card companies!

Shelley said...

All our bills are on direct debit all of the time. It's the best way I know to avoid paying interest on credit cards and the utility companies here in Britain give you a discount if you sign up for direct debit or a standing order (DD covers a variable amount, SS is only for a routine amount). They like to know they'll get their money on time every month and I like not having to bother with writing and posting cheques. It's also a good way to make sure I stay within my credit limit and not bounce any payments...they have an automatic overdraft but the charges and interest rate give me heart failure.

Revanche said...

I'd actually do the same if I was worried about access to the internet and my accounts. I also usually prepaying all regular bills through the next month or two depending on how long I'll be gone.

FrugalVibe said...

It is possible to set up a schedule of future payments of all bills through internet banking to be charged to a credit card on the day it is due. This way it can be set up to execute whilst one is away on holidays. The bills will be paid on the due date and you can enjoy your holiday. Also some banks offer the opportunity to receive bills from third parties as a pdf within your online banking. Handy for easy access, and security (heard stories of thieves breaking into mailboxes to steal personal info) as no paper copies are received in the letterbox.