Using credit cards wisely can enhance your financial health, but many misconceptions can lead to costly mistakes. This article addresses common myths surrounding credit cards, starting with the belief that carrying a balance is beneficial for your credit score. In reality, maintaining low credit utilization by paying off your balance in full is far more advantageous. Another prevalent myth is that paying only the minimum is sufficient; this can trap users in a cycle of debt due to high-interest rates, leading to years of repayment and substantial interest payments. Additionally, some people argue against using credit cards altogether, fearing debt accumulation. However, responsible credit card use can build credit, provide fraud protection, and offer valuable perks like cash back and insurance benefits. Understanding these myths is crucial for making informed financial decisions and maximizing the benefits of credit cards.
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