Credit cards are like magic. Just a swipe of that little piece of plastic and boom: groceries, haircuts, movie tickets, and more. But, there’s much more to it than that.
Credit cards are an important factor in your financial wellbeing and can make the difference between a good or a bad credit score. And, your credit score can make the difference between being able to access a mortgage, get a loan, rent an apartment, and much more.
So, how much do you know about these plastic wonders and how they work? Can you weed through the myths about credit cards or do you have questions about what’s true and false?
Either way, you’re in luck! In this guide, we’re going to dispel 15 common myths about credit cards so you can use them as simply and effectively as possible.
Some people think that not having a credit card keeps away the temptation to spend money that you don’t have. And, in some cases that may be true. After all, according to a 2017 Nerd Wallet survey, the average American household that has credit card debt has a whopping $15,654 worth!
However, having a credit card is an important part of building good credit. What’s more important is that you’re smart about how you use it. If you’re nervous about having a credit card, consider getting one to use just for paying off recurring bills or making small everyday purchases that you would otherwise make with cash or a debit card.
You might have heard that you should keep a balance on your credit card in order to improve your credit score. In reality, what you want to do is wait until your monthly bill comes to pay off your balance and you should pay it off in full or as much as you can at that time.