Debt happens. Learn from this Bankrate expert’s experience

Benét Wilson lost her previous job unexpectedly last May.

Wilson, my colleague and a lead credit cards writer for Bankrate, said she wasn’t too worried about her financial situation at first. She had two months’ worth of expenses in savings, and the program provided some compensation “for the inconvenience.” So she decided to take the summer to travel and map out her next steps, carrying on with a degree of normalcy.

And then an issue with her car brakes popped up. Then, medical expenses happened. It didn’t take long for Wilson to exhaust her emergency savings and then some, ending up with some new credit card debt.

Wilson’s situation isn’t uncommon, and it wasn’t the first time she’d faced credit card debt. If it can happen to a professional credit card writer and expert, it can obviously happen to anyone. More than 1 in 10 consumers (12 percent) use their primary credit cards for emergency expenses, according to a recent PYMNTS report. Considering the high interest rates on credit cards, such a solution can easily result in expensive debt.

If you’re facing an emergency, using a credit card in your wallet as a lifeline might be tempting. But there’s likely a better option — here’s what you need to know.

Using your credit card for emergencies

By August, Wilson was using her card not only for travel, but for everyday expenses and bills as well. This isn’t an issue by itself. Indeed, most cardholders use their primary credit cards for everyday purchases (41 percent), as well as discretionary purchases (15 percent) and paying bills (12 percent), according to PYMNTS. But Wilson wasn’t employed — and her card balance kept growing.

At that point, she realized she had debt she needed to focus on.

Meanwhile, emergencies kept happening. By the time Wilson began working in October and got insurance in November, she’d paid $800 to fix her car brakes and close to $4,000 for urgent care visits and tests.

“I miscalculated, because I thought that the money that I got… was going to last longer than it did,” she says.

Then, Wilson received money from a life insurance policy from her late father’s estate. She used it to pay off her credit card debt and now has a healthy emergency fund with six months’ worth of living expenses. But an influx of cash isn’t something many people can count on, so they end up in debt for years.

For instance, let’s say you have $5,000 in credit card debt at a 20 percent APR, and your budget doesn’t experience a cash infusion. If you pay $200 per month, it will take you 33 months to pay off the balance, and you’ll pay $1,522 in interest.

As you can see, this can be a rather expensive solution to an emergency. Luckily, you might have a better option.

What you can do instead

If your credit is good enough, there’s even a way using a credit card can still be a valid solution — you might just need to look beyond what’s in your wallet currently.

Consider a 0 percent APR credit card. This type of card offers a promotional period during which you aren’t charged interest on purchases. Some credit cards on the market provide close to two years with zero interest.

Of course, you’ll still be putting yourself in debt even with a 0 percent APR card. But it will give you time and flexibility to pay down the balance without worrying about high APR charges. And even if you don’t pay it all off by the time the intro period expires, you can still save a significant amount on interest.

Let’s use the same example again: $5,000 in credit card debt. But this time, we’ll say you got the Wells Fargo Reflect® Card instead of charging the card you already have. With this card, you get a 0% intro APR for 21 months from account opening on new purchases. After that, the card charges 17.24%, 23.74%, or 28.99% Variable APR. If you pay $200 per month, you’ll pay off the debt in 26 months (assuming you qualify for the card’s lowest variable APR). You’ll pay $30 in interest. That’s $1,492 in savings.

Note that 0 percent APR cards usually require good to excellent credit.

There are also ways to navigate unexpected expenses without using a credit card. Homeowners can pull money from their home equity at a low interest rate. People with good credit might qualify for a personal loan with advantageous terms. Even borrowing from friends and family can be an option. You could also look into a possible salary advance if your employer offers it.

Don’t be ashamed

Whatever has landed you with emergency expenses, Wilson recommends focusing on solutions rather than negative feelings.

“I don’t believe in shaming anybody over debt, having been in it myself,” she says. “Come up with a concrete plan to get out. And it might take you a while, but it’s better to kind of dig yourself out, rather than sit there and wallow, making things worse.”

Whichever solution you choose, it probably won’t be perfect. The main thing is to stay proactive and committed to resolving the issue. After that, work on building up your emergency fund and aim to have at least three months’ worth of expenses saved up. That way, next time something happens, you can use your savings account to handle it — and save your credit card for more exciting things, like earning rewards on your regular spending.

The bottom line

When life hits you with a financial emergency, reaching for your trusted credit card can be almost instinctual. It seems like a quick way to resolve the situation, and you can deal with the consequences later.

Sadly, with how high interest rates on credit cards are, these consequences can be costly. A single unexpected event can put you in expensive debt for years.

Instead, consider signing up for a 0 percent APR credit card. With this type of card, you won’t have to worry about interest accrual for the duration of the intro period. Focus on paying down the balance as quickly as you can — and once you’re done, start building an emergency fund so that you never find yourself in the same situation again.