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Most Common Credit Cards Myths

Copyright (c) 2010 Tara Tiemann

There are lots of false beliefs about credit cards circulating amongst consumers and if you are a credit cardholder, believing such myths can be damaging to your personal credit standing. In this post, let us take a look at these common credit card myths and get to know the reality behind them:

Myth No. 1: It's okay to apply for a credit card; you can always back out by not calling the activation number.

Some people may send an application to get the freebie, thinking that he/she can always back out by not activating the card. However, it's important to understand that the moment you send a credit card application, an inquiry will be made on your credit report.

Once approved, the account will automatically show up as active in your file whether you choose to active your account or not. However, in order to use the credit card for a transaction, you will need to call the activation number. The point is, you should never apply for a credit card if you are uncertain about it and do not have any plans of keeping it.

Myth No. 2: You can't avoid unsolicited credit card offers.

To reduce the number of unsolicited offers from various credit card companies, you can call 1-888-5-OPT-OUT. By calling this 1-888 number, your contact details will be removed from marketing lists sold to credit card issuers.

Ethical companies should give consumers the option to say no to marketing offers by Opting Out. Take every chance you can get to "Opt Out" whenever you sign up for a service.

Myth No. 3: You can buy anything you want if you get a card with "no preset spending limits."

Some Issuers advertise having "no preset spending limits" but what does it really mean? The fact is that all credit cards have a borrowing limit except that some cards allow their customers to exceed their limit but approval is determined based on the cardholder's income and payment history.

Myth No. 4: Paying your full balance on time is all that matters.

Paying your balances in full and submitting payments on time are essential steps to avoid bad debt and protect your credit score. But is that all you need to worry about? If you want to avoid further and bigger credit problems, keep in mind to make use of your credit card wisely and avoid going beyond your limit. Financial experts recommend not using more than 50% of your available credit even if your credit card has a low interest rate.

Myth No. 5: All reward credit cards are rewarding.

At first, rewards credit cards may seem to be the perfect card ever. But upon taking a closer look, you may find that this is far from truth. In reality, the best way to be sure whether the reward program is worth it is by studying the Terms and Conditions. Furthermore, what is ideal for one person may not be ideal for others. To really get rewarded, you should choose a reward credit card that fits well with your spending and lifestyle.

About Author Tara Tiemann :

For people who want to live debt free, Tara Tiemann, a credit analyst of <a href="" target="_blank"></a> , is your resource for sites that will help you on your finances and save big money using prepaid credit cards and prepaid debit card.

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Article Added on Sunday, August 22, 2010
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