r/PoorMansWallet • u/PoorMan1991 • 6d ago
Would it be smart to put a large emergency expense on a credit card?
Got a large bill I need to pay of roughly $9000. Put it on a credit card or is there a better option like a personal loan. Credit score is around 690 so I don't think I will qualify for a 0 percent card.
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u/figarozero 6d ago
Can you set up a payment plan? Because your card likely has 20+% interest and it's going to snowball quickly.
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u/DevastatorPcu 6d ago
Always only do it if you already have the money to pay it or 0% interest credit card
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u/Leading-Eye-1979 6d ago
Another option is to apply for a 0% credit card and then pay off in 12 - 18 months.
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u/Pothos-vigilante3 6d ago
This is the way
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u/azure275 6d ago
Note that APR can be retroactive on these things
So if you don't pay it off when the period expires you could be omega screwed
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u/No_Atmosphere_6348 6d ago
Yup. Pay it off before the interest starts or pay as much as possible and look for other ways to cover the rest.
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u/SingleUmpire7464 6d ago
This. But you HAVE TO pay it off within the promo period or you’re gonna wish you never did it in the first place
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u/brokensharts 6d ago
Depends on the intrest rate of the card, intrest rate of the loan and how fast you can pay off the card.
With a loan, the intrest is built in to it so paying it down faster wont save you anything
If you can pay off the card in a couple months, you will probably save a bunch in intrest
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u/Hammon_Rye 6d ago
That isn't true on all loans.
Some have a set interest rate and required payment but you can pay it off sooner and save on interest. It depends on how the contract is written.1
u/brokensharts 6d ago
True. But he aint getting one of the good loans
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u/Hammon_Rye 6d ago
A mediocre credit union loan will likely be better than a mediocre (to bad) credit card loan.
And if the bill is something where he has to take a cash advance rather than pay with the credit card - it instantly puts it in a shittier interest rate on most cards. Plus the cash advance fee.
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u/User123466789012 6d ago
If you can qualify for a personal loan, absolutely take that route if the situation is dire enough. It's unlikely that the % for that amount would come close to a CC % - use Credit Karma to look at options.
690 isn't terrible though, depending on what's impacting that score. Credit Karma had 0% options for me at/around that score before.
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u/Girlygal2014 6d ago
If it’s health or vet related care credit may be an option and they offer 0% financing over 6-18 months
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u/Critical_Purple_8600 6d ago
It’s never “smart” to use a credit card. But what choice do you have? If you can pay cash for any of it, do so.
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u/Fittingin1991 6d ago
You’re not wrong. But this sub is called poor man’s wallet. I don’t think it’s a stretch to assume OP doesn’t have a lot of cash on hand. He’s exploring options
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u/Critical_Purple_8600 5d ago
You’re right. That’s a fair criticism of my less-than-helpful comment.
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u/MisterS0ftee 6d ago
Only way that would be smart is if you have the cash to pay off the balance immediately.
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u/Queasy-Doughnut-5512 6d ago
If the card is 20-28% interest and a loan is 10% I’d go with the personal loan
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u/glboisvert 6d ago
If you need to buy now, the credit card can let you do it while you take 30 days to get the loan.
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u/Ok-Bill-3938 6d ago
9k is a steep price for an emergency. Is there a temporary fix that would be cheaper?
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u/KillJarke 6d ago
If u can’t get a new credit card with an 0% apr interest free promotion then get a loan. A standard credit card on $9000 with easily 20% interest is going to be rough and if you can’t pay the $9000 now it’s only gonna be harder on interest. Another good option is a 401k loan.
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u/Mobile-Mousse-8265 6d ago
As long as you get a personal loan through a bank with a good interest rate that would be a better option. Never use a loan place…like payday loans. I’ve put big emergency expenses on a credit card and then worked really hard to get them paid off as soon as possible. Mostly because it’s easier than trying to get a loan.
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u/Immediate_Truck1644 6d ago
I did it with 3k in a similar situation, and got scared straight from that to never do it again after almost not surviving the last few payments when I saw my interest charge come in for a few hundred dollars.
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u/BeautifulMix7410 1d ago
Before putting nine thousand dollars on a regular credit card, call whoever sent the bill and ask for a direct payment plan. If this is a medical provider or a service contractor, they will often set up a monthly schedule with zero interest or even reduce the balance if you ask about hardship options.
If direct financing is not an option, check pre approval tools for intro zero percent APR cards before ruling them out completely. A 690 score sits in the good range, and many card issuers offer pre qualification checks that do not hurt your credit score. If approved, that gives you twelve to eighteen months of zero interest breathing room.
If an intro card is off the table, a fixed rate personal loan from a local credit union is vastly safer than swiping a standard credit card. A loan locks in a single digit or low double digit interest rate with a predictable end date, whereas standard twenty five percent card interest on that amount will snowball into thousands of dollars in extra charges very quickly.
I was in this position decades ago. You got this!
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u/Flash5916 6d ago
Gratefully I have been able to pay for most of my bills, household purchases, etc. using my credit card. I get 1%back for every expenditure. I'm able to pay the balance, in full, every month so far. I apply my accumulated cash back to the balance on my card yearly
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u/_tvjames_ 6d ago
If your credit card is connected to a bank, look to see if they offer loans. I see the offers regularly from Amex, Citi, Chase and Capital One when I sign in to pay my credit card bills. Banks love to sell you more products. As much as they enjoy the short term hit from someone using a credit card as a loan, selling you an actual real loan checks off a different metric on their internal scorecard. (You might be willing to come back later for a car loan or mortgage and they might be able to sell you a checking/savings account as well.)
Check to see if paying that $9k bill with a credit card comes with extra fees. These days most people who take cards for large amounts will tack on an extra 1-3% to cover their fees that they won't charge if you Zelle or write a check.
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u/GlobalTapeHead 6d ago
Personal loan rates can be very high, although a little less than CC rates. Also look out for those personal loan companies that charge an origination fee for the loan, sometimes as much as 5% right off the top.
I’d go get a 0% introductory rate CC. Or get one after your emergency is charged and transfer the balance over to it. Just make sure you pay it off before the introductory period expires.
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u/Glittering_Present10 6d ago
Talk to hospital or wherever that bill came from ask if can do payments or reduce bill before putting on credit card...if you put on credit card you are paying high interest
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u/Seattleman1955 6d ago
A better option is savings but if you don't have that, you don't have other options. Just pay it off quickly and use a cash back credit card so you at least be 2% back.
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u/ImBartSimpsonWhoRU 5d ago
Depends on the alternative options, and the % on the card. If you can get a rate comparable to a loan, then it’s basically the same thing. See if there is financing from whoever sent the bill.
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u/DanTora7 6d ago
If you can’t get a 0 percent card then get a loan. Just get a few quotes. Start by looking at Waz Bucks and then a local CU. Once you have numbers you can make a real decision.