Credit Card Myths

Just like with everything else, there are many myths about credit cards. Some of them are true, others are only myths, but they might seem real for common people. Since only professionals know the answer, common people cannot make a difference between what is true or what is fiction regarding credit cards. Let us talk about a few such myths which turn out to be all fiction, nothing is true about them!
One of the very first ones is that only people with a very high credit score can obtain credit card. This, luckily, is just a myth, because if this would have been true, only a few people would have access to credit and credit cards. It is true that people with a good score get credit easier, and they can get bigger amounts of money, but people with lower scores have access to credit cards too. Some banks even offer credit to people with bad credit history, in order to make a fresh start. Related to the previous myth, there is another: people think that it is better to get a higher credit limit. This once again is only a myth. The answer is simple: it is not hard to get a high credit limit, but you have to be a wise man to use it smart. A high credit limit does not mean that the owner has a lot of money. It means that if he spends a lot of money during the month, he will have to pay it back to the bank with interest. High credit limit does not necessarily mean high interest rates, but people usually use their credit card, so the higher the limit, the more they spend. At the beginning of the month none of them thinks about the possibly big amounts of money they will have to pay back to the bank. There is a golden rule which applies for everyone: credit card owners should use only half of their available credit, because this amount usually will not put them in financial difficulties when they have to repay it.
Another myth is about the annoying situation when someone’s credit card is stolen. It says that the person is totally liable for the charges. Luckily, this is only a myth. In case of a stolen credit card, the owner might have to pay the first $50, but nothing more. And this is only one of the options, because most credit cards offer zero-liability, this means that the owner does not have to pay anything in case the card is stolen, but it is the owner’s job to notify the bank about the theft as soon as possible. Actually, the sooner the better because this way the bank will be able to block the card, so the thief will not be able to use it. These were the important myths related to credit cards, the rest are quite funny.
One myth says that a person should have four types of credit cards: Visa, MasterCard, Discover and American Express. This would have some logic in case one or two credit card types would not been widely accepted. All four credit card types are widely accepted all over the world, so one can travel with having only one type of credit card, he does not have to open a new account only to get a different type of credit card. Cutting the card would not close the account itself. This is another myth, which obviously is not true. If someone cuts his credit card, he will not be able to use it anymore, but the account will still be open. An account can be closed only if the owner calls the bank’s customer service, or goes to the bank personally and asks for account closing. This myth might come from movies where characters often cut their credit cards, but that simply means they will not use them anymore. If someone had cut his credit card by accident or with a purpose, the bank will replace it charging the owner a small fee. If an account is not closed, the bank will charge it for administration fee, even it is not used, so it worth a phone call or a visit to the bank instead of cutting the card and being surprised when the bank still sends the monthly receipts.
It turned out that there are many myths related to credit cards, but in this case all of them are busted. There might be other myths circulating, but people should ask the bank about the truth, they should not believe to such myths, because they can make big mistakes.