We were all given information about the loan and how to use it, which may be incorrect. It is important to sift through myths and find truths that will help us maintain, rebuild, or start good relationships with a loan that will last for many years.
Most of us have been given information that tells us to get rid of cards that we don’t use, or to use them only in case of emergency. These practices appear to many of us as useful ways to show good use of credit. Although there are a lot of myths, a little information is all you need to fix a lot of incorrect information.
Myth # 1. You should only use credit cards for emergency purposes.
A credit card, which is often used and paid on time, shows the credit card issuing company that you can handle the loan responsibly. The more activity that a credit card company sees, processing responsibly improves your credit rating.
The card, which is used only for emergency cases, does not give the credit card company enough opportunities to observe how you handle the loan. Normal lending, which is paid on time, shows responsible credit management, and this is what increases credit scores and credit limits.
Myth number 2. You should close cards that you have not used for a long time.
The longer you have a card, the better it is reflected in your total credit. This means that a card that you have been using for 5 or 10 years and which is not used much is still valuable. If you close this card, your available credit will decrease and this will negatively affect your credit.
Credit age shows the repayment period of your loan, your ability to positively maintain a credit score for a long period of time. This is attractive to issuing companies. The best approach to working with those old credit cards that are not very popular is to plan small purchases every few months, just to maintain an active card. Credit activity is positive if cards are paid on time.
Myth number 3. Per minute, when you use a credit card, interest is accrued.
You will never have to pay interest on credit purchases if they are paid in full during the grace period. Interest is accrued only on fund balances remaining after the grace period.
The more timely payments are made, the more your credit improves, and this is reflected in your growing credit score. Every timely payment reported to the credit bureau is a positive sign on your credit belt.
Myth No. 4: Merchants can pre-set the amount needed to buy on credit.
By law, merchants may require a minimum purchase of $ 10 for credit cards. No more. Beware of merchants who spend more than $ 10, if you use a credit card, it is not legal.
Myth number 5. You must pay before the due date
If you pay your balance before the due date, you will not be credited with the payment history because you are not billed. Allowing your purchases to remain unpaid during the full billing cycle allows you to create invoices and report payments to the credit bureau in a timely manner.
This is normal, because your purchases do not accrue interest until the end of the payment cycle after the expiration of the grace period. If you allow creating and paying bills, you are doing everything in your power to make positive use of your credit. These positive, timely payments will be reflected in your credit score and increase in your credit limit.
There are many credit myths that keep many people confused and use their credit cards in useless ways. It is worth doing your homework and debunking the many myths that surround the use of credit cards – visit us here to learn about the best credit cards and how to make them work for you.