There are many different credit card myths that convince people to avoid lines of credit like the plague. Discovering the truth may convince you that a credit card can actually be beneficial in some circumstances.
Credit Card Company Owners are Crooks
This credit card myth is just plain senseless. It’s impossible to lump all credit card companies and executives into a single category. The revelation that one credit card company was using dishonest practices to abuse customers does not mean that all credit card companies are engaged in similar practices. Credit card companies come in many different shapes, sizes, and methods of operation.
Your job is to do your research, compare and then decide on which credit card company you’d trust before signing up with any of them.
Credit Cards Always Create Financial Disaster
Credit cards do not always spell financial ruin for customers. The ruin comes from misusing a credit card, failing to make payments on time, or accumulating a sum of debt that is simply too large to be paid back effectively. If credit cards are used responsibly and sparingly, they can actually be quite beneficial to a person’s financial outlook.
Credit cards can improve one’s credit score, spread payments for large items over several months, and offer a solution in the event of an emergency. To enjoy the benefits though, ensure that you pay your balance in full at the end of every month. This will shield you from compounding interest rates on the card as well as late repayment charges.
Beware that credit card interest rates are higher compared to other forms of debt such as mortgages, car loans etc.
Credit Card Interest Rates are Always Too High
There are credit cards with shockingly high interest rates, but these credit cards are not the norm. Interest rates are determined by industry standards, and labeling these rates as “too high,” is failing to take into account the globally accepted industry practices.
Credit Card Perks are Worthless
One common credit card myth that needs to be discussed is the myth that credit card perks are really just worthless incentives used to convince ignorant customers to choose a specific credit card. Of course, there are some credit card perk programs that fail to offer anything of real value to the customer.
This isn’t the case with most perk programs, however. For example, credit cards that work with airlines to offer the accumulation of airline miles are actually offering something quite valuable to the consumer. Capital One is one of the most well-known credit cards with airline benefits.
With this card, you can accumulate miles through regular use of the card, and then you are able to use those miles whenever and however you wish.
The credit card industry is plagued by myths and false accusations. It’s important for a consumer to make his or her own decisions about the credit card industry before deciding to never open a line of credit. And at the end of the day, its you who is solely responsible for the use of that credit card. You determine whether it will be for your good or if it will lead to debt.