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Having a credit card is something many of us may find useful to help pay for anything that our current accounts might not. Furniture, Christmas presents and electronics – all of that can be bought with a credit card without too many questions being asked. In some respects, credit cards can be easy to understand, but there are a few about repayment, credit ratings and benefits.
When using a credit card, you might wonder about the whole package and whether positive or negative ‘facts’ about them are actually true. We’ve found four common myths about credit cards and blown them out of the water:
Credit card applications harm your credit score
This, thankfully, isn’t true in the slightest. No matter how many times you apply for a card, you won’t see your credit score change in any way. This means that if tempted to take out a credit card in the future, you don’t have to worry about it harming your score, unless you fall behind with scheduled repayments. Just in case, a spokesperson from Yorkshire Building Society suggests:
“Set up a regular savings account and shop around to make sure you get the best rate. Ensure that you are on the electoral roll as this can improve your credit score. Review your day-to-day spending to see if you can make any cuts to increase your savings, then set up a budget for essentials and stick to it.”
It’s ok to pay back what you can
When the time comes to pay back your credit card bill and you don’t have enough funds to cover a monthly payment, a token amount might seem like a sweetener the lender will accept. Unfortunately, they won’t. All credit card providers have a minimum required repayment which must be met. Anything less won’t be enough, harming your credit rating in the process.
You can remove any negative info from your credit report
This isn’t possible either. Every bit of information on your report will stay there for a minimum period of seven years. To try and reduce the impact of any bit of bad information on your report, it’s worthwhile being sensible with your money. Paying back what you owe for credit card bills on time and in full can help.
Air Miles and similar rewards are worthless
You shouldn’t choose a credit card based on any ‘rewards’, but some of them can actually be pretty useful. If they accumulate over time, they could help to save you money on something like flights abroad, grocery shopping or even a family day out. Be sure to check the finer details of each ‘benefit’ though.