4 Myths about Credit Cards

Throughout the years it was frowned upon to use a credit card, and even our parents and grandparents still may not be using them, even though they help build up credit.  Before you avoid signing up for a credit offer that you may have received, there are actually myths about credit cards that are just not true.

It is a Mistake to Use Credit Cards

Sure using a credit card puts you into debt, but it does not have to be bad after all.  There used to be a negative connotation that using a credit card means that you do not have the money to purchase the item, and while that may be true to shopaholics, you actually can earn money back with rewards that can add up to hundreds of dollars per year.  Also, you can be more at ease if you fall victim to fraud and can easily dispute, without having an empty bank account, waiting for the charges to be reversed.

Your Card with a Chip is Safer

The point of the new chip cards is to shift liability from the card company to the actual store, being responsible for any extra charges and fees, so stores are shifting over to the new readers, but if you are not present for a purchase, such as online, then it does not matter.  Whether you have a chip card or not, it still requires you to enter in card information, so there is no saving versus a non-chip card.

Can Charge up Your Card as Long as You Pay it off

Maxing out your available credit can actually hurt your credit score, even if you pay the entire balance off the next statement date.  Depending on the timing of the reporting to the credit agency it could show you as being maxed out, and although you know you pay it off, they may see it as spending more than you can afford. You need to understand how available credit and credit inquiries can affect your overall score so that you are able to manage it better.

Interest and Due Dates are set in Stone

It comes a point when you have been paying responsible; on time, and not carrying over a balance, but suppose you do carry over, you feel the 16.99% APR is ridiculous.  Well it is.  Call and renegotiate your interest rate or might as well go to a company that will be lower.  With the due date, if you feel a better payment date falls in line with your paycheck schedule, you can request a new due date with no negative impact.

 

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