8 credit card myths: Get the facts about your credit card
Do you know everything about your credit card? Chances are, there are some things you don't know. Check out this article to learn the truth behind 8 common credit card myths!
Top 8 credit card myths busted!
Credit cards are a common feature of modern life, but many credit card myths and misunderstandings persist.
If you’re confused about using your credit card responsibly and how it might affect your finances, fear not. This helpful blog post will cover the top 8 things you need to know about credit cards.
We’ll look at common misconceptions so that you can make smart decisions with your money.
Whether you already have a credit card or are considering signing up for one soon, stay tuned to learn the truth behind these prevalent myths!
The truth behind these prevalent myths about credit cards
Are you a credit card user? Do you ever wonder if the myths you’ve heard about them are true?
If so, we’re here to help! We’ll be debunking 8 common misconceptions about credit cards.
We will ensure that by the end of it all, you’ll better understand how these nifty payment tools work and how best to use them for your financial advantage.
So without further ado, let’s get cracking on entering the world of credit card myths and reality!
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1. Checking my credit report hurts my credit score
Credit card myths have been circulating for years, and one of the hottest, if not the foremost, is that checking your credit score lowers it.
With 93% of millennials being aware of their credit score, this misunderstanding is thriving. However, this notion is completely untrue!
In reality, monitoring your credit score helps you keep track of your credit-building journey and can help you identify any suspicious activity.
2. My credit score will boost by carrying a balance on my credit card
Credit cards make it much easier to manage and track our finances; however, carrying a balance on your credit card is one of the credit card myths that could break your wallet.
Despite what people may say, carrying a credit card balance will not boost your credit score. It only has the potential to reduce it.
In addition, you’ll be charged interest as long as you keep a balance – meaning what happened to be a small purchase might become much more expensive over time.
3. My income will impact my credit score
One credit card myth is that your income will greatly affect your credit score. While income can certainly give lenders an idea of your creditworthiness, it does not directly equate to a higher credit score.
Your credit score mainly depends on how you manage your credit usage and repayment practices.
As long as you regularly pay bills on time, avoid too much credit utilization, and use credit responsibly in general, your credit score should stay in good condition regardless of the size of your income.
4. Only rich people have good credit score
Credit card myths are rampant, and one of the most common misconceptions is that only rich people have a good credit scores. Credit scores don’t always have to do with wealth status.
Building credit is an important factor for individuals to consider when buying a car or a house and establishing a credit history.
Even if you don’t have a lot of money, there are still steps you can take to improve your credit score— like paying bills on time and keeping balances low on credit cards.
Doing these things will help demonstrate responsible credit use and prove to lenders that your financial situation doesn’t solely determine your creditworthiness.
5. Multiple credit cards will hurt my credit score
One of the most persistent credit card myths is that having too many credit cards will damage your credit score.
This isn’t necessarily true; as long as you make payments on time and carefully manage how much credit you use, you can still have a good credit score even with multiple credit cards.
On the other hand, carrying multiple credit cards does increase the risk of accumulating debt if you’re not careful about monitoring your spending.
People using multiple credit cards should plan and budget carefully to avoid falling behind on payments and incurring more interest charges and fees than intended.
6. Applying for a new credit card will hurt your credit score significantly
Applying for a credit card does not immediately hurt your credit score. This is a common credit card myth that you may have heard, but it’s important to understand the truth.
When you apply for credit, your credit report is checked by the lender, and that assessment can cause a small drop in your credit score.
But if everything else regarding your credit information is good, such as having an on-time repayment history and low credit utilization ratio, then the drop will be minor and temporary.
7. Canceling your unused credit cards will help your credit
It’s a big credit card myth that canceling credit cards you no longer use will hurt your credit score, but it’s the opposite – canceling unused credit cards can help improve your credit.
That’s because fewer credit cards open in your name means less temptation to overspend, and you’re also reducing your credit utilization ratio by having fewer sources of credit available.
8. By increasing my credit card limit, I will affect my credit score
It’s a common credit card myth that by increasing the credit limit of your credit card, your credit score will decrease.
That’s simply not true! In reality, increasing your credit card limit can boost your credit score, as it can effectively lower your credit utilization ratio if you don’t increase the amount of debt you take on.
10 common credit repair myths: separate fact from fiction
Credit repair can be a confusing and intimidating process. Everyone’s been told different ways to fix their credit, but it can be hard to separate fact from fiction. We’re here to help!
Our next blog post will debunk 10 of the most common credit repair myths.
By understanding what won’t make a difference in your score and avoiding bad advice, you can start taking steps toward boosting your credit today! Read on for more
About the author / Vinicius Barbosa
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