Credit cards can be helpful tools—if you know how to use them. But there’s a lot of misinformation out there about how credit cards work. If you’ve ever been told to carry a balance to boost your credit score or to close old cards to improve it, you’ve fallen victim to the many credit card myths that may actually hurt your financial health.
Let’s clear up some confusion by busting 10 of the most common credit card myths. Knowing the truth can help you build a healthier relationship with credit—and make informed money moves.
Myth 1: You have to carry a balance to build credit
The truth: Carrying a balance does not help your credit score—in fact, it could hurt it. What matters more is your credit utilization ratio, or how much of your available credit you’re using. Keeping that number below 30% is ideal.
What helps? Using your card regularly and paying it off in full and on time each month. That builds a strong payment history, which is one of the biggest factors in your credit score.
Myth 2: Checking your credit score will hurt it
The truth: It’s smart to check your credit score—and it won’t cost you points. When you check your own score, it’s considered a soft inquiry, which doesn’t affect your credit. Only hard inquiries (like when you apply for a loan or a new credit card) can impact your score.
Regularly checking your credit report can help you catch errors and spot signs of fraud early. With tools like Best Egg Financial Health, you can keep tabs on your credit without any negative effects.
Myth 3: Closing a credit card will improve your score
The truth: Not necessarily. Closing a card can shorten your credit history and increase your credit utilization—both of which could lower your credit score.
If you’re thinking of closing a card you’ve had for a long time, or closing one with a high credit limit, consider keeping it open unless it has a high annual fee or you’re struggling to manage spending.
Myth 4: All credit cards are the same
The truth: They’re not. Some offer rewards, others have lower interest rates, balance transfer options, or benefits like travel insurance or cash back. Some even offer features to help you manage debt more effectively.
Choosing the right card depends on your financial goals, your spending habits, and what benefits matter most to you.
Myth 5: You should only have one credit card
The truth: It’s okay to have more than one credit card—as long as you manage them responsibly. Multiple cards can offer more flexibility, better rewards, and a higher overall credit limit (which helps with your credit utilization ratio).
Just be sure to track all your balances and payment due dates. Set up reminders or automatic payments so you never miss one.
Myth 6: Paying the minimum is enough
The truth: Paying just the minimum keeps your account in good standing, but it can cost you a lot in interest over time. Most credit cards charge interest daily, so the longer you carry a balance, the more it costs you.
To avoid interest altogether, pay off your full statement balance each month. If you can’t, try to pay more than the minimum to reduce your debt faster.
Myth 7: Interest rates never change
The truth: Many credit cards have variable interest rates, which can go up or down based on market conditions or your credit profile. Even fixed-rate cards can adjust under certain circumstances, like late payments.
That’s why it’s important to read your card’s terms and conditions—and make payments on time to avoid penalty rate hikes.
Myth 8: Using a credit card is riskier than using a debit card
The truth: Credit cards often offer more protection than debit cards. If your credit card is used fraudulently, you’re typically not liable for unauthorized charges as long as you report them promptly.
With a debit card, the money leaves your bank account right away and can be harder to recover. Credit cards also make it easier to dispute charges or get refunds when something goes wrong.
Myth 9: You can’t negotiate with your credit card company
The truth: You can ask for better terms. Many card issuers will consider lowering your interest rate, waiving a fee, or increasing your credit limit—especially if you have a good payment history.
It never hurts to call and try. The worst they can say is no—but you might be surprised how often the answer is yes.
Myth 10: Credit cards are bad for your finances
The truth: Credit cards themselves aren’t bad—it’s how you use them that matters. When managed wisely, they can help you build credit, earn valuable rewards, and even protect purchases.
The key is using them in a way that supports your financial goals. Spend within your means, pay on time, and don’t rely on credit to cover expenses you can’t afford.
Ditch the myths
Understanding how credit cards really work can help you feel more in control of your finances. Here are a few simple tips to use your card with confidence:
- Pay your full balance on time each month
- Keep your credit utilization under 30%
- Choose a card that fits your lifestyle and goals
- Check your credit score regularly
- Stay organized and don’t overspend
With smart habits and the right tools, your credit card can be a steppingstone—not a stumbling block—to stronger financial wellness.
This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.
