10 Credit Myths

Nearly everyone has at least one, many of us have several in our pockets. What are they? Credit Cards. When it comes to credit cards you may have heard or have in your own mind some preconceived myths. In this article will sort out some myths from facts about credit cards.

1. Myth: The banks and financial institutions are there to help you.
   Fact: Although banks and financial institutions want you to believe they have your best interests at heart, they really do not. The bottom line is that they are in business to make money. By offering you credit cards, you will in turn be giving them money. They will earn money from you through your interest payments, late fees, annual fees, over limit and other fees.
2. Myth: You need to use credit cards in order to get the things you want to buy right now.
   Fact: Although you cannot always buy everything you want immediately, you can still have the things you want. You just need to be willing to wait awhile. Save up or wait until you can afford to pay cash for the items you want to purchase.
3. Myth: Your bank will not give you a spending limit that is too high for you.
   Fact: Your bank or financial institution will raise your credit limit at some
   point. They expect and want you to reach that credit limit. The more money
   you charge to your credit card, the more money the bank will be earning in in
   interest payments. Remember, the bank is not in business to help you, but
   rather to make money.
4. Myth: Your credit card account is your money. You can spend the money as you please. This money is not cash and it is not money that you have earned. You will need to pay this money back to the bank or financial institution.
   Fact: The credit card account is not your money. You owe all the money you charge on the account to your bank or financial institution. You will be reminded of this fact very quickly if you max out the credit limit that the bank sets for you
5. Myth: It is not important to understand the terms of your account. A representative from your bank will clearly explain the terms to you and make sure you understand these terms fully.
   Fact: Your creditor does not mind if you do not understand the terms of your account. They are not likely to go out of their way to educate you on the terms of the account. In fact, the bank can benefit if you do not fully understand the terms of your account. You can easily end up paying for fees because you do not understand the terms and conditions of your credit card. Again, this means more money for them.
6. Myth: It is in your benefit when your bank raises your credit limit.
   Fact: The bank may in fact be encouraging you to spend more money than you are able to afford. By increasing your credit limit, you might quickly charge more to your account than you can possibly pay back.
7. Myth: You need credit cards to live comfortably.
   Fact: You do not need credit cards to live comfortably. You may be using credit cards to live beyond your means and to buy things that you really do not need.
8. Myth: Using credit cards makes life easier.
   Fact: Using credit cards can actually make life harder. You can end up over your head in debt very quickly using credit cards.
9. Myth: You can have more extra money, by having more credit cards.
   Fact: The only thing more credit cards really get you is debt, if you do indeed use all or most of the credit lines on the cards.
10. Myth: You can control your debt no matter how great it is.
    Fact: Debt can easily get out of control. Before long your debt can be controlling you.

Having a credit card or two is not necessarily a bad thing. It can be beneficial to have a credit card for an emergency. There may come a time when you have an unexpected expense and are short on funds. You can use the credit card to pay for that expense and then pay off that expense as soon as you have enough money to do so. If you find yourself somewhere without cash and you need to money for some reason, you can also use your credit card and then pay off the balance right away. However, it is also important to be well informed of the terms and conditions of your credit card and the potential pitfalls of charging too much. Credit card debt can get out of control very quickly which is why it is so important to be very cautious.