While having a credit card comes with a number of advantages and disadvantages, you may have also encountered a range of credit card myths along the way.
More often than not, these credit card myths are believed by some people. This may affect whether they apply for credit cards or not.
Applying for a credit card hurts your credit score
It’s always advisable to avoid applying for multiple credit cards at the same time. Applying for multiple credit cards in a short span of time translates to erratic financial behaviour. One application won’t hurt your credit score, unless you ae a bad credit record and you are declined.
If you don’t have a credit limit, you can spend freely
You need to make sure that you only spend what you can afford to pay back each month. A credit limit always exists, to help curb reckless spending.
Having only one credit card is best
Having multiple credit cards isn’t necessarily a bad thing as long as you are able to keep up with repayments.
Carrying a balance on your credit card is good for your credit score.
You need to make sure that you pay your credit card bill on time every single month. If you can’t do this at least make sure that you pay the minimum on time.
Don’t accept a credit limit increase
If you have a higher limit, but you keep your utilisation low, this can help to move your credit score up.
If you go over your credit limit and pay it back before the due date, you’ll be fine
Each time you go over your limit, there’s a good chance that your interest rate will be boosted.
If you pay your credit card bill before the due date, it will increase your credit score.
Whether you pay your bill the day before it is due or a week ahead, your debt-to-credit and utilization ratios won’t change.