Credit cards have changed the lives of many people positively through the convenience that they offer. People can spend before they receive their income and pay at the end of the month. However, there is a catch in the management of credit cards because one must be careful to avoid damaging the credit score. Due to the sensitive nature of correctly using credit cards, there have emerged many myths that are misleading. Luckily, we will cover the common myths here and point out why people should never believe them.
You Should Never Have Many Credit Cards
Everyone thinks that having too many credit cards is unhealthy for a credit score. The argument is that people will be tempted to overspend if they have too many options on their hands. Although this may be true, using credit cards responsibly can prove to be of benefit to your credit score. Each credit card is a line of credit, and responsible use will create a healthy credit history. When all are brought together, they increase the credit score.
Do Not Choose a Credit Card with a Renewal Fee
People shy away from paid credit cards because they believe these credit cards are expensive. However, they are not. It is important to know that they have many benefits. In addition to making you a more responsible user of credit, they have numerous discounts as well. Their initial offers like low interest are also very appealing to those who pay close attention to this. They are worth considering.
Late Payment Will Always Taint Your Score
According to experts from Boostcredit101, you should not be worried if you miss the payment of your credit card until 30 days have passed. Some people panic and think that a credit score is already damaged immediately if they miss a payment date. Lenders usually allow a 30-day grace period for the credit card used to make the payments. However, this habit should be avoided as much as possible because it increases the chances of defaulting even after the 30-day grace period.
You Must Cancel Unused Credit Cards
People often close the services they no longer use because these services do not add any value for them, but credit cards are different. If a credit card was performing well before you stopped using it, its credit line is still helpful in building a good score. Simply said, closing it will lower your score immediately. Therefore, you can retain the old credit cards, but you should keep an eye on them so that they remain open.