Credit Card Reviews

Yourcreditnetwork.com specializes on informing consumers about credit card offers, how to use credit wisely, and occasionally posts humorous insights into the wacky world of credit. There is also a credit card blog which is frequently updated, providing the latest news and information on credit card, and to become a smart consumer.

When you get your first credit card, it can be very tempting to go on a spending spree buying all sorts of new things that you weren’t able to before. It’s difficult, but you must resist that temptation and use your credit wisely. But how to use it wisely? It’s not difficult - it just takes a little planning.

The first thing to remember is that you shouldn’t be spending more than you can afford. The difference in your monthly income and your monthly expenses is your disposable income. This number determines how much you can afford to spend. Without a credit card, the only way to exceed this amount for a given month is to save money (spend less) in the previous months. A credit card can let you exceed your disposable income by letting you use some of your credit. Keep in mind that this will then increase your monthly expenses in the form of your credit card bill.

However, just because you can exceed your disposable income doesn’t mean you should. Eventually, you will reach your credit limit and won’t be able to spend any more on your credit card. This eliminates one of the best uses for a credit card: emergency spending. If you’re on vacation and your car breaks in the middle of nowhere, a credit card is a great way to pay for the repairs. Also, maxing out your credit cards isn’t a good idea if you’re trying to obtain other forms of credit, like car or home loan, as the ratio of credit extended to credit used is a factor in determining your eligibility for those loans.

It may sound like you shouldn't use your credit card except in emergencies, but that isn't necessarily the case; in fact, you should use your credit cards periodically. Repeatedly using your cards and paying them off in a timely manner demonstrates responsibility to the credit card companies which will lead to a higher limit and lower interest rates. A higher limit gives you a bigger cushion to pay for emergencies when they arise. As long as you’re not spending more than you can afford, there’s no reason not to pay with your credit card.