Credit Card Myths

Myth: Using Credit Cards are the best way to build a good credit score

Truth: Credit cards in fact are a great way to build a good credit score, but there are other options that are just as good. As long as you diligently make your payments on time, car loans, buying furniture on credit, or obtaining a personal loan will help build a good credit score. The key is to use your line of credit as a tool with out getting overextended.

Myth: Credit Cards are the only way to make purchases on the internet.

Truth: While credit cards are a very popular and easy way to make purchases on line, there are a variety of other methods such as pay pal and money order.

Myth: It is unsafe to shop online with your Credit Card.

Truth: Shopping online with your credit card is actually a very safe way to shop. Since credit card transactions are digitally monitored, it is much easier to track the source of fraudulent charges than many other forms of payment. Most credit cards offer fraud protection, so if a problem occurs you’re not responsible for fraudulent charges.

Myth: Credit cards are only available to those with good credit.

Truth: Although credit cards that are only available to people with good credit exist, there are many credit cards available for people who have bad credit, or no credit. Be sure to check the terms and conditions of a credit card before applying for credit. Getting a credit card and then paying off your balance each month will typically help you to improve your credit score. If you are concerned with having too much debt, a prepaid debt card can be a good alternative.

Myth: It’s better to the highest credit limit possible than to have a low credit limit.

Truth: Even though it is not necessarily a bad thing to have a high credit limit, some times lenders might worry about the card holder’s ability to repay their outstanding balance if the limit is too high. Ideally your balance should remain below 25% to 50% of the credit limit.

Myth: You should carry at least one each of Visa, MasterCard, American Express, and Discover credit cards when traveling.

Truth: While credit card acceptance was limited in the past, today’s major credit cards are accepted almost anywhere you go. One or two different types of credit cards should be sufficient.

Myth: Closing down your credit card account will remove it from your credit report

Truth: Credit Reporting Bureaus maintain a detailed database of your entire credit history. Despite the fact that your closed credit card will show up on your credit report, it will specify that the account has been closed.


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