Credit Card Myths – What You’ve Been Told (and What’s Actually True)
Credit cards can be one of the most misunderstood tools in personal finance. Some people treat them like free money (yikes), while others avoid them completely out of fear. And honestly? Both extremes can hurt you financially.
The truth is, credit cards aren’t good or bad on their own—it’s how you use them that matters. But there’s a lot of bad information floating around that can cause people to make costly mistakes.
Let’s bust a few of the biggest myths we hear all the time.
Myth #1: Carrying a Balance Improves Your Credit Score
This is probably the most common—and most expensive—myth out there. Carrying a balance doesn’t help your score at all. In fact, it just means you’re paying unnecessary interest to your bank.
What actually matters for your score is your payment history (are you paying on time?) and your credit utilization (how much of your available credit you’re using). If you want to boost your score, pay your statement in full every month and keep your usage low.
Myth #2: You Shouldn’t Have More Than One Credit Card
Having more than one card can actually help your credit score if you manage them well. More available credit can lower your utilization rate, and different cards might offer better rewards for different purchases.
The key is only opening accounts you can manage responsibly. If having multiple cards tempts you to overspend, stick to one until you’ve built good habits.
Myth #3: You Should Always Close Old Cards You Don’t Use
Old credit cards can actually help your credit score because they lengthen your credit history. Unless the card has an annual fee you don’t want to pay, keeping it open—even if you rarely use it—can be beneficial.
If you do decide to close a card, consider doing it slowly and strategically, especially if it’s one of your oldest accounts.
Myth #4: Credit Cards Are Always a Bad Idea
Credit cards are a tool. Like any tool, they can be dangerous if used recklessly, but incredibly helpful when used well. With the right habits, credit cards can help you:
Build a strong credit history
Earn rewards like cash back or travel points
Add extra purchase protection for certain items
The danger comes when you treat your credit limit as spending money instead of as a financial tool.
Our Tips for Smart Credit Card Use
Pay your statement in full every month to avoid interest charges.
Use less than 30% of your available limit (ideally less than 10%).
Pick rewards that match your lifestyle—don’t spend extra just to earn points.
Set reminders for due dates or automate your payments to avoid late fees.
The Bottom Line
Credit cards aren’t something to fear, but they also aren’t something to use without a plan. By separating myth from reality, you can take advantage of the benefits without falling into the traps.
