Home Cards We clarify the main myths about credit cards

We clarify the main myths about credit cards

Get that credit card The one that everyone talks about or that you have loved so much can be an important help or one more complication for your personal finances. In order for it to give you the benefits you expect, you must know how to use it and have accurate information at hand.

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  1. Myth 1. If you have a bad score or do not have a credit history, you cannot get one
  2. Myth 2. Free credit cards offer more value.
  3. Myth 3. Applying for many plastics at the same time increases the chances of approval
  4. Myth 4. The period to spend the welcome bonus begins when you activate the TDC
  5. Myth 5. You should cancel credit cards that you don’t use.
  6. Myth 6. You have to carry a balance from one month to another to improve your score
  7. Myth 7. Checking your credit score makes it go down
  8. Myth 8. Credit cards make you a shopaholic.
  9. Myth 9. The best credit cards are the ones that give the most rewards.

Before comparing to find the best one, you need to clear up some of their common myths. We cannot exaggerate saying that there are many, but it is clear that there are a few that often confuse people.

Credit cards get an undeserved bad reputation because they are one of the most common indebtedness among Americans. At this point we can only conclude one thing, it all lies in know how to use them wisely.

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Apart from this, people get carried away by myths like:

Myth 1. If you have a score bad or no credit history, you can’t get one

These requirements are important for many things, but they are not a real impediment to obtaining one of these products.

Options abound, so you can choose a secured credit card when your score is not the best or products like the Petal Visa if you have no history. If you are a college student, there are many alternatives, such as the Discover It Student Chrome or It Student Cash Back.

Myth 2. Free credit cards offer more value.

This statement depends on the comparison between similar products. As a general rule, the tdc with an annuity they usually give you a greater amount of benefits than those whose issuance is free.

When using these financial instruments with annual commission, surely you get much more value than what you are paying.

Myth 3. Applying for many plastics at the same time increases the chances of approval

Mitso about credit cardsIn fact here apply the opposite: asking for less gives you a better chance of getting a credit card. The recommendation in this regard is that you make a request every 3-6 months for a fundamental reason: every time you do, you are subjected to a hard inquiry (hard query), which it lowers points in the score.

When you make too many requests in a short time, banks view you with distrust and you make your score worse unnecessarily.

Myth 4. The period to spend the welcome bonus begins when you activate the TDC

This assertion can be considered a lack of information. Welcome bonuses often require you to spend a specified amount of money within a set time frame.

For some reason, people believe that the clock for the reward starts ticking when the card is activated. But it’s not that simple, it really starts when you get approved. If you want your miles or points, keep this in mind!

Myth 5. You should cancel credit cards that you don’t use.

This applies if you have too many cards that could be canceled due to lack of use or have no real utility. Of the rest, it is not recommended because of how it can end up affecting your score. When you cancel a TOC, you decrease the amount of available credit and increase the credit utilization rate.

In addition, it can shorten your history and reduce the credit mix, which benefits from having several instruments. If you are being charged an annuity, it is preferable to request a downgrade so it doesn’t affect your score.

Myth 6. You have to carry a balance from one month to another to improve your score

Within the logic of responsibility, this argument does not work. In fact, it works in reverse: paying your balance on time should improve your credit score.

Even though you can’t always pay everything you owe, at least pay a big chunk. When you transfer balance, things cost you more and you don’t take advantage of the rewards.

Myth 7. Checking your credit score makes it go down

Unlike a tough inquiry, when you personally review your credit score it is considered a soft inquiry (soft query).

This action does not negatively affect your score nor does it appear in your history. It is very important to do this review periodically to see how you have progressed and to report any errors in your file.

Myth 8. Credit cards make you a shopaholic.

This depends entirely on how you manage your personal finances. Some believe that they will have more money to spend and others know that it is a tool they must use wisely to get the benefits it offers.

Myth 9. The best credit cards are the ones that give the most rewards.

This is not always true. A 0% APR can be very tempting at first, but when the grace period is up, it’s something else. The same happens with the bonus intro, which offers you a number of points or miles under certain conditions.

When comparing, look for advantages such as: insurance, cash back, point programs, extended warranty, travel protections and more.

They say that we should not believe everything we read or what we hear in the media. In money matters, it is essential to have clarity and reliable sources of information, such as the Blog Hispano de Negocios search engine / comparator.

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