Do you know that many things you believe about credit cards might not be true? Let us take a quick look at some of the common credit card myths and what you need to know about them.
5 Common credit card myths
In the present times, credit cards have become a significant part of our day-to-day life. Most of us believe that these plastic cards make our lives easier by providing us the advantage of quick and safe payments in both online as well as offline transactions. I agree that the card certainly has its benefits, but there are certain widely spread myths which if acted upon will definitely put you in financial crisis.
Here are 5 common credit card myths which you need to know to use them to your benefit: –
Myth 1- Having a credit card is not good for your financial health
This is one of the commonest of the credit card myths and it is nothing more than a myth, really. Credit cards can actually improve your credit score if you can make timely payments. It not only makes spending easier, but also improves your credibility and reputation amongst lenders as it shows your creditworthiness.
Myth 2- Missing out on bill payments once in a while does not matter
If you actually believe this myth and do not pay your bills by the due date at times, then please stop following this practice henceforth. It leads to the payment of a very huge amount of interest which will put you in a tight financial spot. It has a negative effect on your credit score and this will make it difficult for you to avail further credit.
Myth 3- Making the minimum payment each month is sufficient
Oh, the banks will love you a lot if you do this!
You are actually doing a favor to the bank by making the minimum payment each month instead of paying the total amount spent by using the card as that is what they will exactly expect from you. Because the bank will make profits by charging you very hefty interest rates, which are attached to the credit cards.
Myth 4- Applying for more credit cards for settling dues of one credit card is clever
This is a very wrong practice followed by many people as they have a misconception that it is a very convenient means to settle dues and it will also improve their credit score. Applying and using many credit cards will increase your burdens, and it will also make the lenders feel that you are in financial distress.
Myth 5- Credit card is secure for online transactions if nobody knows the PIN and password
People who are involved in frequent online transactions believe that making payment by credit card is secure because all websites do not require PIN or password for final authentication. Other card details like card holder name, card number and CVV number are more than enough to make any transaction online.
However, with network security getting breached very often, it is important that you ensure that the computer that you use for credit card transactions is well protected. Never use a public computer to do the credit card transactions. Also, ensure that the computer has antivirus and anti-malware software installed.
Always try to find out the truth behind the credit card myths before you actually start to believe in them. The best way to do this is to read all the terms and conditions pertaining to the credit card you already hold or plan to hold, properly. Stay informed and use your credit cards wisely to reduce your financial burden cleverly.
Let us know if you are aware of any other myths which you have found to be untrue. We look forward to hearing from you.