Even better than an emergency credit card is an emergency fund in a savings account. When TSHTF, the last thing you need is to add high-interest credit card debt on top of it.

I know, I know, you're like me and you don't have one extra penny in the budget to start socking away for an emergency fund that just sits there doing nothing. But if that's the case, you're not going to be able to pay off the emergency credit card at the end of the month, either! Now your budget that you thought didn't have room for any saving has to somehow make room for CC interest payments from now until forever.

And there WILL be an emergency.

When I was active duty and stretching every dollar to the max, I would get a little money put to the side by dumping my change into a jar.

When the jar was full, I'd roll up the change and stash the rolls in an ammo box in my armory. When those small emergencies would arise, after a while, I just pulled the needed rolls out, changed them into dollar bills at the bank.

Being change, that money wasn't touched until I really got into a bind.

That's 1 way to start building an emergency stash of cash.

If it's lockable and has weapons in it,,,it's an armory!!

I think many are underestimating how useful credit is. Credit is a tool - a financial tool. As long as you use it for what it's intended for, its a good thing, not a bad thing.

Credit becomes bad when we begin to use it to buy 'toys' as opposed to things they increase our potential for generating wealth.

Student loans are a good example. Relatively few high school graduates could afford to pay for college, but with a loan, they can get a degree that increases their skill and marketability many times over, causing a net increase in their overall wealth.

Same with new businesses. Credit can be used to put a business in action sooner, and generate significantly more wealth that would have been possible by saving and buying.

Finally, if it was truly a TSHTF situation, would you really refrain from using credit because you weren't sure of your ability to repay later? Is that a principle you'd die for or let a loved one suffer for?

Some people don't like credit of any sort. That's fine. Some people don't like guns. Both can be dangerous when used unwisely, but both can be very beneficial when used appropriately.

Excellent point. It's much too simplistic to just say "Debt is evil, pay-as-you go divine!"

And let's not forget the role of insurance in big and small (i.e. personal) SHTF situations. We can argue about the credit card versus savings account for SHTF situation all day, but a true SHTF situation is if you become disabled while still fairly young and can't ever work again. You'll really, really be grateful if you have decent disability insurance. None of us can save enough while we're still young to live on for decades in that situation. Well, not unless we invented Google or the iPod or something like that.

No one is going to die for lack of a credit card.

Walk into any emergency room and you will get taken care of.

I never said credit card, I said credit. So walking into an emergency room you are either using the credit the hospital is forced by law to give you (assuming you will repay), or you are just sponging off taxpayers.

But this is exactly the kind of thing credit should be used for: something that increases your chances of creating long term wealth. You can't create much wealth if you are dead or crippled.

I don’t know that insurance can be called credit? And the hospital charges well for it’s serviced, don’t make them out as a money-strapped entity.

I never said to stick taxpayers with a bill; I said you don’t need a CC (or even credit) to get help at a hospital. If it’s a life issue they give you medical help and then get your insurance and payment info later.

I had a heart attack, my dad and I were having lunch and I had the attack, he drove me to the hospital. They ran me into the CAT lab almost right away. It was the next day before they got my insurance info. No credit needed to have the stints put in.


Back to the issue of credit, I don’t think it’s needed to build wealth. Some people do it, but the track record of how the American people use credit does not play out to building wealth.

You can’t barrow yourself into wealth or out of debt.

No money advisor worth his or her salt will tell you credit builds wealth.

I get kind of tired of hearing people say things like this. Most of the cost that you are being stuck with is just being passed along from the medical suppliers. You want to know who is making all the money? Look at Johnson and Johnson, Depuy, Tyco, et al. Like with any business the hospital is charging a markup, but it ain't all that much.

You might be thinking this is splitting hairs, but yes, you did get by on credit for those services. They opened an account with your name on it and gave you net terms. You probably even have the option of paying off the bill in installments. You just chose to make a large payment with insurance funds.
BTW, that CAT lab was probably a one million + dollar room. Room, not facility. Lots of hospitals don't have the cash it takes to outright buy one of those; they take out a loan. They have to make payments on that room, so you are charged accordingly - not because the director is trying to decide just how much he can fleece the sick people. (though I am sure there most certainly are hospitals like that out there )

Debt most certainly does build wealth. For the lender, that is.

It’s kinda like those late night cable commercials: "Buy my proven system and make $150k a month working just 6.7 seconds per day two days a week." If it's so great, why aren't you just using your own plan? The real way to make money is to sell proven money making plans on late night cable.

The best example, literally a parody of itself, is the classified ads that say:
"Send me $5 to learn how to make money just by placing classified ads."
I'll give you three guesses what the secret is.

Yes, you can use debt as a tool by taking a HELOC on your house and investing it in the stock market to build wealth. Sometimes it will work. More likely, sooner or later there is a credit crisis which naturally causes the stock market to go down at the same time the bank panics and doesn’t renew your line of credit. By the way the housing market is down too and you can’t even sell the house for enough to pay for the first mortgage (which you pulled some equity out of so you could celebrate your good credit by going on a cruise). You can’t get ahead, you can’t break even and you can’t even get out. How’s that tool working for you?

What people always forget is that risk, spread over a large group of people averages out. Risk, when it hits YOU, does not average out.