4 of the Biggest Credit Card Myths

While there are virtually endless amounts of credit card offers that come in the mail, or you have one that you’ve had but only keep for emergencies, you may not be taking full advantage of the benefits of all that a credit card can do for you.  While they may have had a bad reputation in the past, there are actually more pros then cons for having one, as long as you can curb the spending, so ignore any myths that are out there.

Having a Card is Unnecessary

Well, it’s not life or death that you have a credit card, but they can actually provide plenty of benefits that you would not get otherwise with a debit card.  They provide great fraud protection, especially these days with the number of hacks, if your card is breached, then any charges that you are hit with do not clean out your bank account and can remain pending on the credit card until the dispute process is resolved.  In addition, credit cards offer some of the best rewards, which you can earn cashback on the normal purchases that you would make anyways, so why turn down free money.

Credit Score Isn’t the Most Important

Unless you don’t mind paying a higher APR % and waste money on higher interest payments every month, let alone getting approved at all, go right ahead and let your credit slip.  For those that do care about their credit and strive for it to be the highest it can, are rewarded with the best interest rates on the market, which could save hundreds of dollars a month on say, a mortgage, while keeping car payments lower, and able to pay little interest when repaying a credit card balance.

Closing an Account with Zero Balance

Getting into debt can be a huge weight on your shoulders, and depending on the balance, could take years to get out of, so when you finally do rid yourself of a credit card balance, the first reaction might be to close the account, cut up the card, and never use a credit card again.  Now while you can opt for cutting up the card and never using again, you should actually keep the account open so that the available credit actually improves your score, and closing could great reduce, depending on the size of your other accounts and the balance against it.

Nothing Wrong with Making the Minimum Payment

Now while you will certainly be in good standing with the credit card company by making the minimum payment, as I’m sure you would be their favorite customer, with your monthly payment just barely covering the interest payment and doing little to chip away at the actual balance, could in fact take decades to get rid of the balance.  Sure, you will not be penalized by the company for making the minimum but you are only hurting yourself by wasting money away every month on interest, when it could be best used for more important things like saving for the future, or even taking a vacation.

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