Managing Credit Cards - Budgeting Your Credit

If you have credit card debt, it can be hard to scrounge up the money you need for an emergency fund.  Financial advisors want you to have enough cash in savings to cover three to six months of expenses.  I want that too.  We all want that kind of financial reserve.  But, in the real world, we all have bills to pay.

One thing that is helpful is to dedicate your credit cards to specified emergency expenses only.  For example, you could pledge to only use your Sears card for car repairs and tires.  Your Visa could be reserved for veterinary bills only.  Then, as you pay down your balances, more and more credit becomes available for emergency use only.

Once you've paid a card way down, you can shift money into savings for that fabled cash reserve.  But, by pledging that your card will only be used for a few purchases, you'll avoid running it up unnecessarily.