Credit cards are a boon for those who want to purchase expensive things on credit or to build a strong credit score. But often people are scared to get a credit card because they have ‘heard’ some things and ruled out that credit cards are bad. To shift credit card from your list of enemy to your list of friends, we have busted some credit card myths. So read along to know the reality about credit cards:
MYTH 1: Credit Card Will Badly Affect My CIBIL Score
Having a credit card statement helps you to build a strong credit score, not the opposite! When you pay your credit card dues on time without exceeding the limit, that statement can help you get quick loans in future. But if by any chance you do not pay your dues on time, bank will charge you with penalty fees and it will show on your credit report. Evidently, it will affect your CIBIL score; but only if you exceed your limit or forget to pay your bill.
MYTH 2: Unused Credit Card Won’t Affect My CIBIL Score
Remember it’s a credit card not a debit card! So if you keep it unused it will affect your credit score badly. You do not need to buy anything expensive every time to show the usage of your credit card. Instead you can pay your basic utility bills with credit card. This is the source of your credit. Banks and NBFCs always want to know how you the given credit. So not using the credit at all can affect negatively.
MYTH 3: The Reward Points Are Of No Use
That is clearly a myth! It’s a reward; it is of certain use for sure. Though the rewards points look smaller in beginning; but as you use your card, the percentage of reward points increases. Once you have enough reward point, you can use them in bulk to avail amazing benefits like cash back and discounts.
MYTH 4: Multiple Credit Cards Can Hurt My CIBIL Score
Having multiple credit cards allows you to enjoy multiple benefits but it does not affect your CIBIL score. You can use your multiple credit cards in rotation to purchase various services. Not paying their dues on time and exceeding their credit limit will affect your CIBIL score badly. But if you manage your cards neatly, having an extra card can come as a benefit for you.
MYTH 5: Credit Card Can Make Me Shopaholic
Well credit card doesn’t have any magic powers to change a person’s behavior. The card holder has to keep a watch on the spending and usage of credit card. Every time you use your card, you get an SMS and mail about your credit balance. Here you have to control yourself from spending more than your limits. Otherwise, credit card doesn’t make you pay for the things you don’t want to!
Now that all the credit card myths are busted, click here to apply for one!