Debunking Credit Card myths: What you should know

Credit Cards are a popular financial tool, making our lives easier with ease of use and flexibility. They are accessible to all age groups- from students to retired professionals. Ever since their adoption, these cards have transformed how people make payments and manage their finances.

However, they are often surrounded by myths that can lead to confusion and misinformation. Many people hesitate to use them due to misconceptions about high debt, complicated fees, hidden charges, or negative impact on credit scores.  However, a Credit Card provides convenience, rewards, and financial flexibility when used wisely.

It is necessary to separate fact from fiction and debunk some common myths that may be holding you back from making an informed decision and significant investment:

Myth 1: Having Credit Cards means falling into debt

One of the biggest misconceptions is that owning Credit Cards automatically leads to debt. Responsible utilisation, such as paying off the full balance each month, can help you build a strong credit history without accumulating interest. These cards offer an easy and convenient way to manage expenses, and with proper financial discipline, they can be valuable assets.

Myth 2: Applying for Credit Cards can lower your Credit Score

Whenever you apply for this card, the company conducts a thorough background verification and inspection of your financial behaviour, which is reflected in your credit score. A strong repayment history and maintaining a low credit utilisation rate demonstrate good financial management, which boosts your creditworthiness.

Myth 3: Credit Cards are used only for emergencies

These cards serve as a catalyst for accessing urgent funds when needed. Especially in medical emergencies, these cards can be useful for making immediate payments, as they come in handy in such situations. It is the primary benefit of owning Credit Cards. But you can utilise these cards for other occasions as well, enjoying benefits and maximising profits including reward points, and discount offers.

Myth 4: Apply for multiple Credit Cards at once for better benefits

Some believe that a Credit Card apply for multiple cards at the same time increases the chances of approval or maximises rewards. However, applying for too many Credit Cards in a short period can negatively impact your Credit Score. Instead, it is better to choose a card that aligns with your needs and financial goals before applying.

Myth 5: Hidden charges make them expensive

Many assume that all Credit Cards come with hidden fees, making them costly to own. In reality, the terms clearly mention the annual fees and late payment charges, maintaining transparency.

Conclusion

Understanding the facts about Credit Cards can help you make strategic and informed financial decisions. When you apply for a Credit Card, opting for the right one based on your lifestyle needs can unlock numerous benefits, from cashback to travel perks and festive offers.