Credit cards can be very valuable in emergency situations. Your particular emergency may vary, but we all have them from time to time. The most important thing when using credit cards for emergencies is to understand exactly when you should and should not be using the credit card to pay for your purchases. Credit card should not be used to cover unnecessary items, but they can come in very handy for necessary purchases.

A very simple rule of thumb is that if you can eat or drink it, you should not be charging it to your credit card, because it's probably not enough of a necessity. If you are going to hold on to the item you wish to purchase for a year or more, then it may be a good situation to use the card, but it may not. If you plan to charge something that you could not get in any other way, then it may be a good use for the card.

One example of how you can use credit cards to your advantage is when buying something on a payment plan where the interest rate offered on the store's plan is higher than the interest rate of your card. For example, some furniture stores offer payment plans, but their interest rates could be 15 to 20 percent. If you have a credit card with a 9 percent interest rate, then it makes financial sense to charge the furniture, because the interest rate is lower. As long as you were going to purchase it anyways, and you are able to make the payments on time each month, then charging the set makes sense. Pay it off as quickly as possible, because an additional time means added interest. However, don't just charge the furniture because you want it and cannot afford it; this tip only works if you were planning to purchase the furniture without using your card.

Emergencies cover more than just large ticket items that you'd like to put on a payment plan. For example, if you are out of a job or have bills that need to be paid, a credit card can bail you out. In situations such as these, a credit card can cover the expenses without much thought. However, keep in mind that because of interest rates, you will be paying more in the long run. Remember to use your card wisely. If you are using more than one credit card, check on the benefits of debt consolidation or balance transfer options to avoid racking up a large credit card bill from unnecessary expenses.