Posted on: 6 January 2015
Credit cards might seem like universal residents of consumers' wallets, but they aren't. If you don't have any credit cards, a financial emergency becomes even more stressful because you have no way to resolve the situation. If you find yourself in such dire financial straits, follow these four tips to get back on your feet.
1. Check Your Credit Report
Just because you live without credit cards doesn't mean you don't have access to cash. If your credit score is high enough, with no serious negative marks, you might be able to qualify for a personal loan.
In 2012, Fox Business reported a 6.5% increase in personal loan approvals over the year 2010. Consumers often prefer personal loans to credit cards because it is not a revolving debt, which means that it is no longer an issue once it is paid off. There are other benefits of personal loans, such as:
- No collateral: You don't have to sign over the title to your house or vehicle to obtain small personal loans.
- Fast access: It doesn't take long to apply for a personal loan or to obtain the cash, especially with direct deposit and electronic transfers.
- No equity: A second mortgage or refinancing of an existing mortgage requires a certain amount of equity, which isn't available if you are underwater on the loan.
2. Apply for a Payday Loan
If you do not have a good enough credit score to qualify for a traditional personal loan, payday loans offer a simple alternative. You must meet the lender's qualifications to obtain the loan, which might include:
- Employment: Many lenders require you to have held a job for a certain period of time
- Income: The amount you are able to borrow depends on your verifiable income
- Identification: You must be able to prove who you are
If you decide to take out a payday loan, request only the amount you need to resolve your financial emergency. Pay off the loan as quickly as possible to reduce interest payments and other fees, then start an emergency savings account to prevent further trouble in the future.
3. Raid Your Attic
One method to obtain fast cash is to sell something you do not need anymore. Pawn shops, consignment stores, and secondhand shops are all options if you have no other way to obtain money when you need it.
Items to consider for sale might include:
- Outdated electronics that are still in good shape
- Designer clothing that no longer fits
- Jewelry made with precious metals or stones
- Appliances you have replaced but not thrown out
If you are selling something of considerable value, consider having it appraised first. In a financial emergency, you might be so desperate or panicked that you sell a valuable item for much less than it is worth.
4. Ask About Payment Schedules
When you are caught in a financial fiasco, you might be able to work out a deal with the person to whom you need to pay money. For example, if you suffer a serious injury or illness, consult with the hospital or treatment center about payment plans.
Financial emergencies are so common that even some auto mechanics and repair shops offer payment plans. This allows you to fix your mode of transportation without having to come up with a huge lump sum.
To negotiate a payment schedule or plan:
- Offer a schedule that you can keep based on your income and assets
- Suggest some form of collateral, such as your car title at a mechanic's shop
- Inquire about specific credit programs, such as health credit lenders
Whether you choose a personal loan, payday loan, or some other method of obtaining the cash you need, keep track of your financial records. When you are out of the woods, focus on building up cash reserves to prevent similar situations from recurring.Share