Debunking Five of the Most Common Myths About Credit Cards

Credit Card Myths #1: I Need a Credit Card to Build My Credit History.

Fact: The truth of the matter is, while credit cards do help in building your credit history, you do have other options available to you. Small personal loans and automobile loans are also great ways to build up your credit rating.

Credit Card Myths #2: Using Cash-Back Credit Cards Will Save Me Money

Fact: The only way a cash-back credit card will save you money is if you pay off your balance in full each month. If you don’t pay off your balance in full each month, using cash-back credit cards can actually cost you money in high interest rates. Rewards cards traditionally carry higher interest rates than other cards, so if you don’t pay your balance off in full, you’re better off with a low-interest credit card than you are with a cash-back or rewards card.

Credit Card Myths #3: Credit Cards are Vital for Online Purchases

Fact: While many merchants do only take credit cards as a payment method, many sites will gladly accept echecks, Bill Me Later, and Paypal payments. Another thing to consider is that you can use a Visa check card just like a credit card for online purchases without paying interest or annual fees.

Credit Card Myths #4: You Have to Have Great Credit to Have Credit Cards

Fact: If you want a low-interest credit card without any annual fees, you’re going to need good credit. However, if you’re willing to pay a little more in interest and an annual fee then even people with blemished credit can have credit cards. There are many credit cards available designed just for people with bad credit, helping those people to rebuild their credit history.

Credit Card Myths #5: It’s Not Safe to Shop With Your Credit Cards Online

Fact: Using your credit card online may be one of the safest ways to shop. Most credit cards offer fraud protection, so if your credit card information were to fall into the wrong hands, you wouldn’t be responsible for the fraudulent charges.