September 18, 2018

Top 6 Common Credit Card Myths

Credit cards from different banks vary in so many ways. To get the best credit card deals, it is important to do your research and compare credit cards from two or three providers. After weighing the pros and cons of each, you’ll be able to choose the right one for your needs and preferences.

Some people may frown upon the idea of getting a credit card. However, by using it the right way, it can be helpful in managing your finances. In this article, let’s take a look at six common myths associated with credit cards:

1. Having a credit card will negatively affect your credit score

A high credit score will greatly help you when you plan to get a major loan.  Is opening a credit card a good idea? In this case, not really. It’s all about the timing. If you have a low credit score, it’s not wise to get a credit card, especially if you intend to get a home or car loan in the next few months.

2. Going beyond the credit limit will not be a problem

There may be instances when you have purchases that went over your credit limit. Your credit card company may let you off the hook, but not all the time. There’s a reason you have a credit limit in the first place, and if you overspend, you’ll end up having to pay fees. Your card provider can also raise your interest rate.

3. Leaving a balance on a card can improve your credit score

When you use your credit card, it actually helps improve your credit score, but it’s not the same when you leave a high balance on your card. Aside from having to pay unnecessary interest charges, lenders may think that you cannot pay your debts.

4. Balance transfers can help you save money

If you have multiple credit cards, you may be tempted to transfer balances to a credit card that offers much lower interest rates.  As with anything else that has a contract, always read and understand the fine print. Check if there’s a fee for transferring balances to a new card, or that the low interest rate will not apply to new purchases. When you compare credit cards, make sure to check details like this.

5. Get only one credit card

When you’re just starting to build your credit score, this is a good idea. But if you think it’s beneficial to get more than one card, and you’re confident and responsible enough to pay on time and in full, then by all means get another one. Get the best credit card deals in terms of rewards and benefits that are aligned with your lifestyle.

6. Paying only the minimum amount due every month will not hurt

While credit card companies always require a minimum payment per month, try to pay on time and in full on a regular basis. This indicates that you can manage your finances well, which will help improve your credit score.

Do you have other tips on how to get the best credit card deals? Share your ideas in the comments section.

About the author  ⁄ Marxa Dillan

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