4 of the Most Common Credit Card Myths Debunked

Many people use credit cards in their daily lives. They offer a convenient way to pay for purchases, can help you build credit, and can provide reward opportunities.

Unfortunately, there are some credit card myths that people continue to believe and treat as fact. Let’s explore some of these myths so you can feel more confident about using credit cards. 

1. You should avoid having more than one credit card

Many people fear using credit cards because of the dangers they hear about credit card debt. Yes, credit debt can negatively impact your finances and it can be difficult to escape this type of debt because of high interest rates. 

However, only some people who use credit cards have credit card debt. In fact, many people pay their balance in full every month and stay out of debt. Credit cards can be useful as long as you’re using your cards with care and are only charging what you can afford to pay off every month. 

Having more than one credit card can prove beneficial. With multiple rewards credit cards, you can earn more rewards. Plus, it can be a good move for your credit. 

Having more available credit and using only a small portion can help you reduce your credit utilization ratio or the amount of available credit you use. Adding another card to your wallet can increase your available credit and lower your credit utilization. 

2. Closing old credit card accounts is good for your credit score

Don’t assume you must close a credit card if you no longer use it. While you can do this, it could negatively impact your credit. Why? One factor that makes up your credit score is the length of your credit history. 

If you have an older credit card on your credit report, you may want to keep the account open. Doing this could improve your credit score. The age of each account on your report, the average age of your accounts, and other factors are considered. 

If you want to keep an older credit card account open and it has an annual fee, ask your credit card company if you can downgrade it to a no annual fee card. This will keep your credit card account open and maintain your account history, which can help your credit. 

3. Credit card rewards aren’t worth the effort 

Some consumers believe that using rewards credit cards isn’t worth the effort. If you’re using your card carefully and making responsible choices, these cards can be well worth it. You’ll earn rewards when you swipe your card for everyday purchases. 

If you’re a responsible credit card user, you may want to consider getting a rewards credit card. Many people use one of the best cash back credit cards to earn money back on their spending. 

4. It’s bad to have a credit card with a high limit

Some people are scared of having a credit card with a high limit. But even if your credit card issuer has extended you a lot of credit, you don’t have to use it all. Having a higher credit limit doesn’t automatically hurt your credit score. 

A high credit limit can benefit your credit, especially if you only use a small portion of your overall limit. But remember, you should only spend what you can afford. If you struggle with overspending, you should use credit cards sparingly. Don’t put yourself at risk of a debt issue. 

Don’t be fearful of credit cards

It’s good to be cautious about your credit card usage. But don’t be afraid to use cards. Knowing the truth about some common credit card myths can help you feel more confident and in control when using credit cards for everyday purchases. 

Are you in the market for a new credit card? Don’t miss out on the opportunity to earn rewards. Review our list of the best rewards credit cards to learn more.