<prompt> Human: The conventional wisdom seems to be that you should have cash on hand to cover 6-12 months living expenses, in case of emergency. I certainly see the logic in having some kind of buffer. But why does it have to be cash and not un-utilized credit?As a 24 yo investing for retirement, the opportunity cost of holding 10k in cash is quite high, considering long term sp returns average 10. Of course, credit card APRs are higher, averaging 15co. But the chance of needing to dip into credit is 100. There must be some kind of riskreward calculation you can do to compare using cash or credit as your emergency fall back.Just to note, I currently have a very healthy emergency fund plus always pay my ccs off in full at the end of the month. Im just considering how much Im going to contribute to my 2013 roth ira.  <response>: Credit isnt guaranteed. Some emergencies that affect you will also have an effect on your available credit. Some financial obligations cannot be satisfied by credit at all or without significant fees.Many emergencies involve the loss of work. Spending on credit with no income and no reasonable assurance of future income can be disastrous. 