Life has a funny way of throwing curveballs. One minute you’re cruising along, and the next, an unexpected expense or a broader economic shift can leave you feeling a little unsteady. In these moments, it’s natural to look for ways to push through the uncertainty and keep your financial footing. While building savings is always a smart move, did you know that when used strategically, your credit card can be a valuable cushion during tough economic times?
Now, we know what you might be thinking. Credit cards and “crisis” don’t always sound like a great mix. You’re right – mismanaging credit can certainly add to financial blues. But at Benchmark FCU, we want to show how our low-rate VISA credit card can be a real benefit, offering a financial safety net without dragging you into the marsh of high-interest debt.
The Benefits of a Benchmark FCU VISA Credit Card
One of the first things you’ll notice about our Benchmark FCU VISA card is the absence of an annual fee. That’s right; there are no extra charges just for having the card in your wallet. In times when every dollar counts, this is a significant advantage. But the real story lies in our interest rate. The national average credit card interest rate is currently over 20%. Let that sink in for a moment. If you carry a balance on a high-interest card during a financial pinch, a significant portion of your payment will likely go towards interest, not the principal. This can make it feel like you’re running in place.
Our Benchmark FCU VISA card offers a much lower interest rate than the national average – as of today, it’s less than half the national average. This difference can be a game-changer when you need to make essential purchases or cover unexpected costs during an economic downturn. Instead of getting caught in a cycle of high-interest payments, you have the potential to manage your balance more effectively and pay it down faster. Think of it as having a financial breathing space when you need it most.
A Good Credit Card Can Cushion the Blow in Tough Times
So, how can a low-rate credit card act as that helpful cushion? Let’s explore a few scenarios:
1 Bridging the Gap During Income Fluctuations
Imagine a situation where your income temporarily dips due to reduced hours or a job loss. While you’re actively seeking a solution, your regular bills – groceries, utilities, and car payment – still need to be covered. A low-rate credit card can help bridge that gap, allowing you to meet these essential obligations without immediately depleting your emergency savings. This buys you valuable time to get back on your feet without the added stress of accruing exorbitant interest.
2 Tackling Unexpected Emergency Expenses
Life is full of surprises, and unfortunately, some of them come with a price tag. A sudden car repair, a medical bill, or an urgent home repair can throw even the most carefully planned budget into disarray. Instead of liquidating long-term investments or taking out a high-interest loan, a low-rate credit card can provide immediate access to funds to handle these emergencies. This allows you to address the issue promptly and then pay off the balance at a more manageable rate.
3 Covering Day-to-Day Necessities Strategically
You should be extra strategic about your cash flow during tough times. Using your low-rate credit card for everyday necessities like groceries and gas can help you keep your cash reserves intact for other urgent needs. As long as you’re diligent about tracking your spending and making at least the minimum payments, this can be a way to manage your finances more flexibly.
4 Consolidating Higher-Interest Debt
If you’re already carrying balances on credit cards with high interest rates, our low-rate VISA card could be a lifeline. Transferring those balances to our card can save you significant money in interest charges over time. This frees up more of your funds to pay the debt, rather than just servicing the interest. It’s like hitting the reset button on your debt and giving yourself a much more favorable path forward.
Credit Card Vs. Emergency Savings
Now, you might wonder, “Why use a credit card instead of my emergency savings?” That’s a valid question. Your emergency fund is crucial for unexpected and significant financial setbacks. However, using your credit card for some of the more manageable temporary dips or unexpected costs can help you preserve your emergency savings when needed. Think of it as having two layers of protection.
Develop a Plan of Action for Debt Repayment
Of course, responsible credit card use is imperative for overall financial health. If you rely on your credit card more than usual during an economic downturn, it’s crucial to have a plan for paying down the balance. Here are a few tips to get you started:
- Track Your Spending: The first step is knowing where your money is going. Use budgeting apps or spreadsheets to monitor your credit card transactions.
- Make More Than the Minimum Payment: Paying only the minimum will prolong your debt and increase the total interest you pay. Aim to pay more whenever possible.
- Prioritize Paying Down High-Rate Balances: If you have multiple credit cards, focus on paying down the card with the highest interest rate first (after transferring any high-interest balances to our low-rate card!).
- Create a Realistic Repayment Plan: Look at your income and expenses and determine a realistic amount you can consistently put towards your credit card balance.
Don’t Go It Alone: Benchmark FCU is Your Ally in Tough Times
Navigating economic uncertainty can feel overwhelming, but you don’t have to go it alone. At Benchmark FCU, we’re committed to being that helpful local source you can rely on. Our low-rate VISA credit card, with no annual fee, is designed to provide you with a valuable financial tool to help cushion those unexpected blows without the burden of excessive interest.
Ready to explore how the Benchmark FCU low-rate Visa credit card can offer you greater financial flexibility and peace of mind? Visit Benchmark FCU today to learn more and take advantage of this opportunity to transfer higher-rate balances, help you cover emergency expenses, or manage day-to-day necessities with greater ease.
Protect yourself from scams, by regularly reading our Benchmark FCU blog. Read “Coffee Shop Con Game: Spotting Evil Twin Wi-Fi” now.