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Debunking Credit Card Myths

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Debunking Credit Card Myths

However, they have their own fair share of drawbacks.

If you’re a shopaholic, it is advisable to consider certain factors before you go on to make a credit card related decision.

Often, what appears on the face of it may be quite far from the truth.

Read on to know about the common myths:

Myth #1 Credit Card And Debt Are Synonymous

People have this huge misconception that simply using a credit card will ultimately lead to debt problems. However, it all depends on how financially responsible you are.

If you keep track of your expenses and pay off your balances timely each month, it won’t be such an issue. The easy access to information will help you make well-informed decision as to which credit card to go with, by comparing their credit card terms and interest rates.

Myth #2 Whoops! You Went Over Limit. You’ve Got To Pay The Fees Now

Often, when presented with a chance to buy on credit, a person might indulge in impulsive buying decisions.

This inevitably means that you go over limit unintentionally. Often people automatically assume that this entails an additional fees incurred on their accounts. However, until you confirm that you purposefully went over limit, you have the freedom to escape this fee. There are usually no unpleasant surprises awaiting you for sure.

Myth #3 As Long As You Pay Your Balance In Full, You Can Utilize The Entire Limit On Your Credit Card

We are afraid that the reality might just be the opposite, as charging the limit on your card again and again can have negative effects on your credit score.

You should always try to use around 30% of your available credit so that your credit utilization ratio remains stable, which ultimately contributes to your credit score.

This follows that you should have more than one credit card so that you can distribute your expenses over two to three credit cards.

Myth #4 Travelling Exempts You From The Protection On Your Credit Card

On the contrary, travelling overseas certainly does not bar you from receiving the protection on your credit card. You can very much retain them, as far as receiving liability protection in case of theft or fraud.

With 4 offices in Toronto, Whitby and Mississauga, we offer credit and debt counselling services. Contact EmpireOne at 416.900.2324 for free consultation.