5 Common Credit Card Myths Debunked

Credit cards can be powerful financial tools when used wisely, but misinformation often leads to costly mistakes. Whether you’re new to credit or just looking for clarity, we’re setting the record straight on some of the most common credit card myths.

• Myth #1: Carrying a Balance Helps Your Credit Score
  Carrying a balance does not improve your credit score. High balances can increase your credit utilization, negatively impacting your score. Paying your balance in full each month is the best way to avoid interest and keep your credit strong.

• Myth #2: Checking Your Credit Score Hurts Your Credit
  Reviewing your own credit score is considered a "soft inquiry" and has no impact on your credit. It’s a good habit to check your score regularly to stay informed and spot any potential issues early.

• Myth #3: You Only Need One Credit Card
  Having multiple credit cards can help your credit score by increasing your total available credit, which lowers your utilization ratio. However, it’s important to manage them responsibly and avoid overspending.

• Myth #4: A Higher Credit Limit Means More Debt
  A higher credit limit does not mean you have to go into more debt. A higher limit can improve your credit utilization ratio if you keep your spending low. Just be mindful of your budget and spending habits.

• Myth #5: Closing Old Credit Cards Helps Your Credit
  Closing an old credit card account can shorten your credit history and reduce your available credit, which may lower your score. Unless there’s a compelling reason, keeping older accounts open is generally beneficial.

Understanding how credit cards work can help you make smarter financial decisions. By separating fact from fiction, you can take control of your credit and use it to your advantage!