New Delhi: Many misconceptions about credit remain in the minds of people. But if used properly, the credit card keeps your financial health better. If you also have this misconception about the credit card, then remove it.
Know what are the misconceptions about credit cards
Avoiding raising the credit limit: Credit card holders generally refrain from increasing their credit limit, as they fear it will increase spending and later lead to debt. However, they do not understand that if used judiciously, an increased limit can not only help improve their financial health, but also to meet immediate financial emergencies.
Credit cards can harm your financial health: Many of us avoid applying for a credit card for fear of falling into a debt trap. However, irresponsible usage can land you in a debt trap. Therefore, if you use credit properly, you will never fall into the trap of debt. Those who are using a new credit card can create a better credit history.
Old credit cards should be closed to improve credit scores: Closing your existing credit cards can result in savings, as this will cut annual or new fees. However, use the card according to your need. Also, closing any of your credit cards reduces your total available credit limit.
Credit cards with annual fees / new fees are preferable: Zero Fee credit cards are preferred by many. For example, shopping cards give more benefits on groceries, lifestyles and other retail expenses, while fuel credit cards offer higher discounts and cashbacks on fuel transactions. Similarly, travel credit cards consistently give travelers more rewards, cashbacks and discounts on travel, hotel stays and meals.
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