Outlook Money
Myths associated with credit cards, loans, and credit scores often hold back people from financial growth. Here are 10 common myths that keep people stuck.
Credit cards aren’t inherently bad. Mismanagement creates debt, but once you start to use it responsibly, credit cards build credit history.
Using credit cards or cash are equally safe, provided the individual tracks spending and protects their details.
Paying only the minimum interest prolongs debt and increases charges. Always pay in full if it is possible.
Credit scores affect card approvals, personal loans, and sometimes even for job applications. It is a sign of credibility and trust for lenders and employers.
A high credit limit doesn’t mean more money. Having a high credit limit is about responsible usage, not spending beyond means. Knowing what your repayment capacity is helps you to maintain it.
Closing old accounts can reduce credit history and hurt your score. Keep them active responsibly and try to pay off the dues if any.
Multiple cards can help you manage rewards, emergencies, and a proper credit utilisation ratio. Knowing which card comes in use when is essential.
Using credit and paying it off builds credit history. Zero credit card usage doesn’t help you strengthen your score.
Loans do not always damage your credit score as timely repayment improves your credit history and credibility.
Review your credit report regularly. Errors are rare but can be corrected to maintain a healthy score.