You might have been told certain things about credit cards that either encouraged you to cancel yours or simply not sign up for one in the first place. While it can be argued that there are downsides to having them, the truth of the matter is that they offer considerable value. Nonetheless, there are many myths that continue to be passed around as factual. Here are just a few of the myths in question that Robert Jain and others can debunk.
"It's good to have a remaining balance on your credit card." For those that believe this to be true, think again. Bob Jain, as well as other names in the world of finance, will tell you that this can actually increase your interest rates. In short, you'll end up owing more over time. This is why it's in your best interest to pay off your debts, in full, as early as possible. This will allow you to save more money than you would have otherwise.
"Having one of each big credit card is useful." One of the reasons why this myth is continually passed around is the idea that one may be stuck in a location where one card can't be used. The truth of the matter is that if you have one of the big names, such as Visa or Mastercard, chances are that you won't have to worry about being out of luck. There are certain locations that are particular about eligible credit cards, though, so it pays to do some research.
"I should be open to the idea of applying for multiple credit cards." Even though this may not be detrimental to your credit score, depending on how high it is, there's no clear-cut proof that it's beneficial for everyone. In fact, applying for multiple credit cards may yield no return at all. For most people, credit score improvement should be the name of the game. This will provide more of a buffer if you ever decide to apply for a card in the future.
For those that have been on the fence about applying for their first credit card, understand that much of what you've heard doesn't hold water. In fact, it pays to have this in your possession, even if you don't plan on using it often. After all, if you're in a situation where cash is scarce and your debit card won't cut it, credit will be the next best option. The more that you know about credit card myths, the easier it will be to apply for one.
"It's good to have a remaining balance on your credit card." For those that believe this to be true, think again. Bob Jain, as well as other names in the world of finance, will tell you that this can actually increase your interest rates. In short, you'll end up owing more over time. This is why it's in your best interest to pay off your debts, in full, as early as possible. This will allow you to save more money than you would have otherwise.
"Having one of each big credit card is useful." One of the reasons why this myth is continually passed around is the idea that one may be stuck in a location where one card can't be used. The truth of the matter is that if you have one of the big names, such as Visa or Mastercard, chances are that you won't have to worry about being out of luck. There are certain locations that are particular about eligible credit cards, though, so it pays to do some research.
"I should be open to the idea of applying for multiple credit cards." Even though this may not be detrimental to your credit score, depending on how high it is, there's no clear-cut proof that it's beneficial for everyone. In fact, applying for multiple credit cards may yield no return at all. For most people, credit score improvement should be the name of the game. This will provide more of a buffer if you ever decide to apply for a card in the future.
For those that have been on the fence about applying for their first credit card, understand that much of what you've heard doesn't hold water. In fact, it pays to have this in your possession, even if you don't plan on using it often. After all, if you're in a situation where cash is scarce and your debit card won't cut it, credit will be the next best option. The more that you know about credit card myths, the easier it will be to apply for one.
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