The idea of having a piece of plastic with a high limit is a pipe dream. After all, all credit cards are bad and need avoiding at all costs. At least, that is the stigma in today’s day and age. Even in 2017, there are myths that circulate which are putting the general public’s finances at risk. And, people eat them up as if they are the gospel truth. It is time these credit card myths stopped doing the rounds and people took back the power.
Here are the lies which an average person thinks to be true, but which are not.
#1: You Shouldn’t Apply For One
After all, if you don’t have one, you can’t harm your credit, right? Wrong! At it happens, the people in charge of credit ratings use things such as credit cards to give a rating. Therefore, if you don’t have one, your score will be low and it will be harder to obtain loans and a mortgage. Of course, applying for multiple cards is a bad idea because a rejection does harm your credit score. But, there is nothing wrong with filling out an application and keeping the plastic in your back pocket. If you want to get on the property ladder, it’s essential.
#2: You Have To Pay The Balance In Full
A smart person pays the balance off each month for two reasons. Firstly, only paying the minimum doesn’t help your credit score. Secondly, being in debt will result in additional interest payments. Both of these are not true. To begin with, paying off the minimum amount each month actually helps a person’s credit rating. The reason is that the banks can see you are capable of handling your finances by being in debt. It might not sound logical, but it’s how it works. Also, there is no reason to pay off the debt if the interest payments don’t kick in for a while. It’s a waste of money, especially if you have more debts to worry about.
#3: High Debt Is A Nail In The Coffin
Let’s start by saying that no one wants to owe a significant amount of money. Once the figure gets above your budget, it is an uncomfortable and potentially dangerous scenario. But, it is worth noting that credit card debt isn’t the end of the world. Even if you can’t make the repayments, companies like consolidation.creditcard specialize in affordable plans. By merging the debts, it transforms into one simple and easy to manage arrear.
#4: Credit Card Companies Always Win
This links to the casinos in Vegas and the belief that the house always wins. Sure, the odds are in their favor, but you can come out on top if you play your cards right. The trick is to understand how the industry works. Whether you carry a balance or you don’t, it is possible to find a solution. For example, by transferring the balance to a new card, there is no reason to incur penalties.
You have to be on the ball, but if you’re organized, it is possible to take on the house and win.