yes... it's not easy to set up perfect emergency funds... however, it's good to be aware that we need to do that... i can never stress that enough...

johnsmith... good for you... hopefully your emergency funds helps reduce anxiety and sleepless nights

In a perfect world we would all have at least 3-6 mths of emergency funding on hand, but the reality in these economic times is it doesn't happen. Especially for families with kids, between groceries, meds, school supplies.....etc etc etc, even most families with 2 incomes can not find the extra few dollars to put aside for a rainy day.

Hi Monty,

Yes, I do have emergency funds set up which I'm happy to say is a fair amount that’s growing. However, I am not at the point where I feel comfortable enough if anything should happen, I’m covered and then some.

I see where you are going with this and I do agree. When my emergency funds are at that comfort zone, one of the first things I will be doing is switching to a no annual fee card.

Also, I’ve been looking around and noticed a few very low interest cards (6%) with no annual fee (Capital One) but I don’t like the catch that you must always pay the balance off in full every month and that you have to maintain the card for at least 3 years. Even though I know this wouldn’t really be a problem, I’m very apprehensive about stipulations like that (Seen too many bad experiences with 3 year cell phone contracts).

Thanks

some expenses are never expected....

do you have emergency funds set up?

Thank you T.J. That is exactly what I wanted to know.

As you stated before, considering a yearly fee of $25 as insurance for paying low interest is well worth it should an unexpected expense arise which will save you a lot of money in interest....sh**t does happen in life.

Thanks again for simply and directly answering my question.

Bottom line....you would pay at the rate of interest that was in place on the day of the transaction.

Here's a more realistic example if you'd like but regardless, it is very valid and realistic question...

You need to purchase a very expensive airplane ticket immediately due to a family emergency and will leave the following day. Obviously, you do not have time to switch cards and wait for it to take effect before you purchase the ticket.

Again, anyone know the answer to the question?

Thank you,

I find it hard to believe if your driving down the road and your transmission falls out....that your going to be able to switch to a new card before the bill needs to be paid.

Thank you TJ & Monty.

Monty, half the time I don't think big expenses are planned which is why I'm thinking to keep the low interest card but my question now based on your advice is...

If I make make the switch to a high interest no fee card and then I make an unexpected big purchase one day and switch to the low interset card the following day, will I be paying for it with the new low interest rate the day the card takes effect or will I still be paying the high interest rate which was used at the time or transaction?

What you said makes sense if it's that simple but is it? Wouldn't everybody do this that can? Is there something I'm missing like switching cards hurts your credit? I just can't see the credit card companies making it that simple to switch back and forth when you carry a balance or not without some kind of catch...can anyone please confirm?

Thanks

if you're not carrying a balance... why do you need a low interest credit card?
If you're going to need the card later for cash flow, then you switch over to the low interest before you do that transaction...
if you pay your balance off at the end of each month, then you don't really low a lower interest rate...

just switch over to a no fee card for now... switch back to low interest when you actually need it.