Top 10 Credit Card Myths That You Shouldn’t Fall For

Credit Cards are a blessing and a curse and managing them well is a hot topic that is always debated about. Whether you are considering getting one or already have one and are looking to get another, managing Credit Cards seem like a daunting task. Don’t worry; we are here to help you pick the Best Credit Cards in the market in addition to demystifying some of the myths surrounding them.

Credit Cards are an important financial solution which helps you pay for tickets online, shop, even book groceries and have them delivered. Credit Cards provide individuals with the opportunity to make important transactional decisions well and instantaneously. However, if they are not usedjudiciously, they can spell financial doom and worrisome debt. So out of the hundreds of options available out there, how do you pick the best Credit Cards?  By carefully evaluating all the options available to you by different banks, you can pick one that suits your needs.

Before you find a suitable card, you need to figure out your spending patterns and analyse it before deciding on one. Apart from this here are a few Credit Card myths you should watch out for:

  1. Credit Cards Cripple Your Finances

A common misconception about Credit Cards is that you will end up spending a lot more than you earn if you get one. Credit Cards are firstly issued on the basis of your earnings. Hence it is not possible to get a Credit Card with a large credit if you have small earnings. If you spend responsible, you will be able to use a Credit Card to manage your finances well.

  • Credit Card is an Expensive Purchase

One of the biggest myths surrounding Credit Cards is the fact that most people are afraid to get one because they are told that it is expensive to get a Credit Card. Most banks provide Credit Cards in India with no annual fees charged. Some banks like Citibank also have Credit Cards which also offer zero lifetime fees as well.

  • There is Only One Type of Credit Card

Many banks provide Credit Cards for different purposes. From a petrol Credit Card to a fine dining card to a rewards card there are plenty of Credit Cards to choose from. HDFC Bank, ICICI Bank, SBI, Citibank are some of the banks that offer theBest Credit Cards in India market. Different Credit Cards will have different rewards, so no single choice exists when it comes to Credit Cards.

  • A Credit Card Will Hurt My Credit Score

This is a big one. Most people believe that having a Credit Card will hurt your credit or CIBIL score. A healthy credit score to maintain is between 700-750, so, if you get a Credit Card and spend wisely and repay on time, it will help you improve your score.

  • Credit Cards are Not Secure

One of the other common Credit Card myths is that there is zero security available in case of theft or loss of the card. This is not true. Most Credit Card frauds occur in the first few hours of loss, so if you make a call to your bank they will block the card immediately, and it will be defunct. Banks such as Citibank, Standard Chartered, ICICI, HSBC, have some of the best security systems in place to ensure Credit Card frauds are minimised.

  • Credit Card Gets Spoilt with Usage

Most people believe that using a card for long will erode the chip and it is tedious to get a new card. ICICI Bank Coral Contactless Card and Citibank Card have contactless features which make it easy to pay by tapping instead of swipe. This ensures that the card is well-preserved and has minimal damage.

  • Credit Card Rewards Cannot be Redeemed

Different cards offer different types of rewards and more often than not the rewards are good depending on the points collected. Most banks also provide easy facility to redeem your points online. For instance, the Citibank Cashback card is designed for those who love shopping and can get maximum benefit for spending money. Similarly, the SBI Yatra Credit Card is one of the best Credit Cards in the market for those who wish to travel as there are a bunch of rewards on domestic and international travel.

  • Do Not Use a Credit Card Online

Today, most of our transactions happen online. From booking flight tickets to buying groceries, we conduct a lot of payments online. Another big myth around Credit Cards is that it should not be used online as the transactions are not secure and someone may hack your pin. Credit Cards are protected with the highest security, and it is very difficult to obtain details on a card so easily. Banks have placed strict rules and processes in place so that Credit Card transactions can happen online with zero stress.

  • A Credit Limit Increase is a Bad Idea

A credit limit on a Credit Card is given on the basis of your spending and repayment capacity and also a couple of other factors, so most people who already have a Credit Card do not increase their limit due to fear of overspending. If your expenditure is in check and you can afford to payback on time, you can always increase your credit limit as it’s not offered to everyone.

  1. Reward Points are Worthless

As mentioned in the article before, a lot of people do not get Credit Cards due to fear of spending a lot and also because they believe that the rewards are not worth it. It can come as a surprise that reward points can help you save a lot in the long run.

The most important document to read before getting any Credit Cards are the terms and conditions.The finer aspects of transactions, charges, interest rates are always denoted in the document provided with the card or online. Now that we have busted some of the Credit Card myths, it is prudent to remember that Credit Cards are a readily available form of a loan which will ultimately accrue interest and has to be utilised wisely.