Finance

Your Credit Network Urges You to Use Your Credit Wisely

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. To figure that out, you need to have a budget. The details of making a budget are outside the scope of this article but, put simply, take your monthly income and then subtract your monthly expenses. The difference 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.

The IberiaBank Visa® Classic Card, issued by IberiaBank, is designed for those with average credit who may occasionally carry a balance. Although this card does not offer a rewards program, it does offer access to common services and benefits, including online account access and lost and stolen card reporting.
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How Credit Cards Work

Have you ever stood behind someone in line at the store and watched him shuffle through a stack of what must be at least 10 credit cards? Consumers with this many cards are still in the minority, but experts say that the majority of U.S. citizens have at least one credit card -- and usually two or three. It's true that credit cards have become important sources of identification -- if you want to rent a car, for example, you really need a major credit card. And used wisely, a credit card can provide convenience and allow you to make purchases with nearly a month to pay for them before finance charges kick in.

That sounds good, in theory. But in reality, many consumers are unable to take advantage of these benefits because they carry a balance on their credit card from month to month, paying finance charges that can go up to a whopping 23 percent. Many find it hard to resist using the old "plastic" for impulse purchases or buying things they really can't afford. The numbers are striking: In 1999, American consumers charged about $1.2 trillion on their general-purpose credit cards.

Not since 2002 have Americans been so good about paying their credit card bills on time.

Credit card delinquencies (late payments) are at the lowest rate in eight years, indicating a "modest improvement" in the struggling economy, according to the American Bankers Association's Consumer Credit Delinquency Bulletin.

Consumers paying more credit card bills on time"It's clear that consumer balance sheets are improving. People are borrowing less, saving more and building wealth. These are all positive signs," said ABA Chief Economist James Chessen, in a press release.

4 key questions to ask when considering a cash advanceA credit card cash advance is like grocery shopping at a convenience store: handy but expensive. It's not surprising, then, that recession-bitten consumers are turning away from cash advances.

That's a good thing, financial experts say. Except in the most dire of emergencies, cash advances are a bad financial idea.

"That's your highest-risk money, when someone's using their credit card as an ATM," says Mark Berg, president of Timothy Financial Counsel, a Wheaton, Ill.-based financial planning firm.

Advances, essentially loans from your credit card issuer, are easily available in two ways: via an ATM or by cashing a convenience check. But you pay for that convenience with high fees and compounded interest rates that soar into the double digits. While some offers come with low introductory, or "teaser" rates, they can seduce consumers into a false sense of security, adds Heidi Albert, president of School2Life.com, a Chicago-based company that teaches money-management skills to young adults.