One of the issues that can cause more confusion in the financial world are credit cards, which makes a lot of myths circulating around them, many of them false. Here we tell you some of the most common false myths:
A credit card will damage my credit score
The myth here is that it is better to never have a credit card, as this will result in more debts. Fortunately, that couldn’t be further from the truth. Before lending money, many providers will want to verify that you are able to keep up with payments. If you receive a card and do not make payments on time, that could be seen as a sign that you cannot handle the money and will negatively affect your score. However, if you use it correctly, the result will be a positive assessment.
It is better not to pay the entire balance of the card
It is common to hear the advice that you should always have some debt, and never return the total balance of the card. This is false. Without a doubt, it is best to make payments as soon as possible. If you do not, your credit score will be adversely affected. The advice here is to pay as much as you can each month to show that you have your debts under control.
Not having credit cards means a good credit score
This is another concept that is completely false. If a provider wants to determine if you are able to keep up, there is nothing better than seeing how you have done it in the past. Suppliers will want to see your history to determine if you are eligible for a loan, so not having a credit card could jeopardize your position with many providers.
The more credit cards you have, the better
The thought behind this myth is that managing several cards successfully shows your ability to handle debts. However, banks will value the different types of debt that has been taken, not just the cards, and some of these types may give more points than a card. For example, a person with a mortgage and a credit card may have more possibilities than one with several credit cards.
A credit card will result in a debt spiral
Again, this is one of the biggest false myths about credit cards. As long as you can pay your debt on time and spend within your budget, there is no reason for this to become a big debt.