Some people have the wrong notion when it comes to using credit cards. Understanding the real deal about credit cards can actually save you from the risk of bad credit. Are you aware of what these credit card myths are? Check out the following:
Myth No. 1: It’s okay to apply for a credit card; you can always back out by not calling the activation number.
Have you applied for a credit card and yet changed your mind later on and decided not to keep it? If you think that not activating the card will protect your credit score, you’re mistaken. Take note that the moment you send your credit card application, credit inquiry will be instantly made which can affect your credit rating.
If you want to use the credit card to pay a bill, you will need to call the activation number. However, once your application has been approved, the account will automatically be reflected in your credit report whether you call the activation number or not. Bottom line? Don’t apply for a credit card is you’re not sure whether or not you want to keep it.
Myth No. 2: You cannot do anything about unsolicited credit card offers.
There is something you can do to cut down unsolicited mails from credit card issuers. Call 1-888-5-OPT-OUT to “opt out” which means your contact details will be removed from marketing lists that are sold to credit card companies.
Myth No. 3: You can buy anything you want if you get a card with “no preset spending limits.”
Not exactly. Some people are made to believe that their credit cards literally have “no preset spending limits” which means they can charge as much as they want to their card. But the fact is that all credit cards have a limit except that some issuers allow their customers to exceed depending on the cardholder’s income and payment history. If you are earning minimum wage, don’t expect your borrowing limit to stretch too high.
Myth No. 4: Paying your full balance on time is all that matters.
Aside from timely payment, it’s also important to watch your credit limit usage. Financial experts recommend not exceeding 50% of your available credit no matter how low the interest rate is.
Myth No. 5: All reward credit cards are rewarding.
From afar, all reward credit cards may seem to give the best offer. It is only after you take a closer look at the complete Terms and Conditions that you can see the real deal. More importantly, choosing the right reward credit card depends on your spending and lifestyle. Remember, what is ideal for one person may not be the same for you. To really get rewarded, you must be able to pick the right reward credit card and handle it responsibly.
About the Author
Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards,prepaid credit cards and prepaid cell phone service can save you big money!