Carrying a wallet bumped with cash is just too much for the present generation who prefer swiping cards. And with the trend of using a credit card for almost all the transactions, it is nearly impossible to step out of the house without it. More importantly, the paces of life of the people today do not really allow them to count and take the cash they need, especially wherever credit card apply. People are always looking for a better and convenient way that would get them rid of carrying anything but a heavy pocket.
While applying for a credit card is the most vital keep for any individual, people seem to be too much convinced with the myths of using it. These myths usually came into the life of the cardholders in the form of advice, which may be given for the good but unfortunately, it is of no use when you actually dig into the details.
Here are six myths people believe in without a second thought when it comes to using a credit card-
1. Maintain a minimum balance
If seeing this is nothing new to you, you have probably fallen into the wrong advice. Many people are of the opinion that maintaining a minimum balance would enhance their credit score, something, which is completely not false. The reason as to why you must maintain a minimum balance is described as – if you don’t maintain a balance, say around 5% to 30%, your credit card may get canceled by the issuer of your account may get deleted.
However, you should not fall in such horrible advice because the fact is completely opposite. To get a good credit score, you must-
- Make timely payment of all your bills
- Check your credit report regularly
2. Credit card is not free money
If you want to buy something that is generally out of your budget but you have a credit card apply to pay for the same, rethink! Credit card money is not free money which means you will have to pay the amount you have used within a specific date as communicated by your bank or issuer through mail and SMS. To escape the burden of repayment that of course comes with additional charges (interest and GST), you must keep in mind that-
- You use amount which can be repaid easily
- You don’t have an issue with the repayment
- You have another option just in case the money you are expecting from someone or your workplace fails to make through your bank account
3. Keep going with minimum payment every month
This is one of the dreadful myths which can get you into trouble. In case someone lacks the amount to pay the monthly bill, he is likely to consider this option. Others believe that paying the minimum amount would get them rid of interest. However, you must know what the minimum payment is. It is the least amount set by the lender that you will need to pay each month, which results in more payment due to the interest charges. Moreover, if you only opt to make the minimum payment each month, your credit score may get hampered.
4. Credit card and interest
Many believe that using a credit card leads to paying interest, even if you pay the full bill each month. This is not true. The interest may come to the scene when you have exceeded the due date for the same. Other than that, it can be used safely without any issues.
5. One card is enough for an individual
If you are a shopaholic, you know the right value of credit cards from different issuers. It is true that many credit card issuers or banks tie-up with different brands to offer exciting deals. You may miss on saving while shopping if you are stuck with a single card. So, you can simply apply for a credit card or more than one depending on eligibility. There is no issue carrying multiple cards.
6. Credit card addition
A credit card is all about how disciplined a person is in terms of expenses. Since credit card offers an excellent escape from spending hard cash, you don’t feel the burden of spending then and there and can split the payment into more repayment conveniently. If you are a newbie to the world of credit cards, then you must know your personal financial strength before swiping a card. So, if you are sure about your financial status and want to make your payment easier, a credit card apply would be something you deserve.
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Notably, you will have to pass certain criteria before you can apply for a credit card. Before the transaction and online shopping, you will need to check the terms and conditions well to find if there is any hidden charge. Also, get into the habit of paying the full bill before the due date, which will not only keep you fret-free in the long run but also enhance your credit score.