4 Myths About Credit Cards Debunked!

Owning a credit card is one of the most significant financial assets. It might only seem like a tiny plastic in one’s wallet, but it can offer one a great reward. It’s more secure against fraud liability as compared to debit cards. However, the credit card has attracted a lot of truth and myths concerning people’s finances. It would be best if you learned what drives your credit score so that you can set a responsible tactic for your credit card usage. It’s time to separate facts from fiction and set aside the common myths about credit cards. Here’s the truth behind most credit card myths.

 

  • A person only needs one credit card 

 

Here’s a myth that most people seem to hold on to each time. However, it’s wise to apply for credit judiciously because opening multiple credit cards within a short period can result in your credit score dropping.

Nonetheless, if you are a responsible credit card user, then having more than one card makes the right sense. You ought to consider a few essential items.

First, you are in a position to manage debt better. Second, having more than one credit card will enable you to take advantage of reward plans which suit your spending habits. Lastly, it allows you to have a backup if a specific merchant fails to accept a particular card.

 

  • It’s no big deal if you go over your credit limit 

 

Many credit card agencies allow a few purchases, which might let you over your limit. However, it would help if you didn’t make it a habit. It’s one way that can make credit card issuers raise the current interest rate.  

There’s a high likelihood that you’ll pay an over-the-limit charge. These sneaky fees have a way of eating away at your budget over a period. 

 

  • You can carry a balance to improve your credit score 

 

There are various instances, such as bankruptcy, that can affect your credit score. At times one may lack a credit card or a credit history. However, not to worry, you can click here for more information on how a credit card can assist you in building credit. 

Once you acquire your card, you shouldn’t leave a high balance on the credit card as it can cause you to pay added interest fees. Your credit card lender will keep a close eye on the card utilization rate. A high percentage is an indicator that you aren’t able to pay your debts. You ought to keep the utilization rate at 30% or less the total outstanding credit. 

 

  • Credit score can improve if you close a card you aren’t using 

 

It’s often tempting to close a credit card that you aren’t using at the moment. A section of your credit score gets calculated by the card’s utilization rate. If you keep an open credit card that goes unused, it might push down the total utilization rate if there’s a higher balance in your other cards.   

You ought to have the right information concerning credit cards so that you can practice responsible spending. You can click here to acquire more information about getting a credit card with no credit. Debunking the myths around credit cards is a significant step in understanding matters credit.

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