Top 10 Myths About Credit Cards

Everyone has an opinion on credit cards. Unfortunately this means that there are a lot credit card myths circulating. This can make learning about credit cards a difficult process. Here are the top ten myths about credit cards and the truth behind them:

1. Credit cards are bad. Many people know that credit cards can get you in a lot of financial trouble so they think that having them is bad. Credit cards are neither bad nor good. How they affect you depends on how you use them.

2. You can pay off one credit card with another. It is technically true that you can open a new card and transfer the balance from an old card to it, effectively paying off the first card with the second. However, this has fees associated with it, you still owe the original balance and you’ve lowered your credit score.

3. You only need to pay the minimum payment on credit cards. Doing this causes serious financial problems including higher debt and lower credit scores. Pay more than the minimum to keep yourself out of credit card trouble.

4. Credit card debt is easy to erase. Many people think that they can get out of credit card debt by filing for bankruptcy or asking a debt management company to deal with the problem for them. These solutions ruin credit and rarely work in the long wrong. You should never run up credit card debt assuming that it can be dealt with down the line.

5. People with bad credit get bad credit cards. While it’s true that you can get much better credit card offers when you have good credit, it’s not true that you have to settle for bad deals when you’ve got bad credit. You just need to look more carefully for the right offers.

6. Credit card companies are evil. Many people hate their credit card companies even if they love their credit cards. They find dealing with customer service to be a hassle. They may even blame the company for their debt. The fact of the matter is that credit card companies are a business and they’re there to make a profit but they aren’t inherently bad. Some are even great at customer service and a few give back to the community through charity work and by offering green credit cards to their consumers.

7. Using credit cards online makes you susceptible to identity theft. If you protect yourself properly then you should be able to securely use credit cards online.

8. Credit cards last forever. Not so. If you’re a bad borrower, your cards can be canceled. Or you might choose to cancel them yourself if you’ve got a bad lender.

9. All credit cards are the same. Many people think that a credit card is a credit card. This isn’t true. There are all types of credit cards with different terms, different benefits and different company policies behind them. Explore your options carefully to choose the card that is right for you.

10. Everybody should use credit cards. A related myth is that no one should use credit cards. The truth is that the individual has to assess this for himself and make a smart decision about whether credit cards are right for him at this time.