A Credit Card Isn't an Emergency Fund

Many people consider a credit card their emergency fund. While convenient, it's rarely a good idea for most people, especially during times of economic turmoil.

There seem to be two reasons that people opt for the credit card as an emergency fund rather than building a stash of cash in a savings account: the time it takes to raise enough money and the paltry interest earned from a bank account. Here are a number of reasons to reconsider.

Better interest rates: Placing emergency-fund money in an investment that earns a better return than a savings account usually relies on the false assumption that some securities always rise. Stocks and other investments can be volatile, especially in the short term. ...