Since the earliest days of credit card usage, there have been myths and rumors floating about by a bunch of people who really have either nothing better to do, have no common sense, or like to make themselves seem smarter than they really are. It’s kind of like your cousin who said that he caught a 75 pound tuna in the swimming hole in his backyard; did you believe him? Of course you wouldn’t. So we’ve come up with the Top 5 Credit Card Myths and debunked them in the process.
- canCredit cards get you into a lot of trouble- Credit cards have never officially gotten anyone into trouble; horrible spending habits, however, are quite the demons. The credit card is simply the means allowing you to spend way too much money. Proper knowledge of how credit works, both for the cardholder and the financial institution, will yield a healthier bank account for anyone, with or without a credit card.
- Credit cards are expensive- Then you have the wrong credit card. Your credit card company of choice may or may not decide to charge you an annual fee of anywhere from $29 to $100- but that’s up to you. The only part that may be expensive is the accrued interest. However, if you pay off the balance in full every month, you’ll never pay a dime in interest charges.
- American Express does not charge interest to its cardholders- In fact, American express charges a lot of interest, but the cardholder needs to pay the entire balance off by the pre-set due date each month before any interest can accrue. AMEX charges a minimum annual fee of $75; that would pay quite a bit of interest on other cards, don’t you agree? The fact still remains that no credit card will charge you interest as long as the balance is paid in full each month by the due date, whether or not they have an annual fee.
- Credit Cards are Insecure- Credit cards offer more means of security than cash ever could. You automatically get extra insurances when you purchase plane tickets or rent a car. The warranty on electronics is extended almost automatically. Furthermore, if your purchase breaks or is damaged in any way that isn’t covered under the manufacturers warranty, there is a good change that the credit card that you bought it with will take care of the necessary repairs.
- Don’t sign the back of the card in case someone steals it- Before you even begin to think about not signing your credit card, think about what you’re not doing for a minute; it actually reminds me of “what do you do with an ice sculpture after it melts?” By leaving the back of the credit card blank, a potential thief will not have to work very hard at forging your signature on the back, now will they? The signature matching will never be an issue or be questioned when the card is used because the signature will match perfectly when the would-be thief signs a name on the back of the card to match the name on the front of the card. Besides, if you read the tiny print on the back of the card, you will notice that it reads, “NOT VALID UNLESS SIGNED”.
