Thanks to countless pieces of regulation and fine print shoved everywhere within credit card agreements, the average person may not have a clue when it comes to what credit card policies directly affect them. As a result, ignorance about credit card policies has been allowed to run rampant, giving consumers more disinformation than information. Here, we will clear up some of the biggest misconceptions about credit cards so that you can be informed.

Minimum Balance Paid = No Interest

This is a ludicrous assumption, but one that prevails throughout the minds of many credit cardholders. Typically, the minimum balance to be paid on a credit card comes to 4% of the total balance. While some think that by paying this they are avoiding interest, the reality is that your debt is growing if you have any leftover amount on your credit card. The only way to avoid interest charges is to have a zero balance.

Debit Cards Improve Credit Score

This claim is blatantly false. While misuse of your debit (overdrafts, for instance) can lead to your credit being affected negatively, there are no credit benefits to using a debit card. Debit cards may look the same as credit cards, but they are different in one key point: they work off of existing reserves from a bank account, not credit. In other words, your credit score doesn’t get a bump from you spending money you already have.

Checking My Credit Hurts Me

If you are the type of person who is a hypochondriac and insists on checking your credit score every week, then you may cause damage to your credit score. Otherwise, checking your credit occasionally will pose no risk to your credit. Whenever you check your score, it appears to be the same as applying for a loan or new line of credit. If you do this often, your score can be impacted but for most people it is never an issue. We recommend signing up for a credit monitoring service or limit yourself to checking your credit once every three to six months.

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