{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.indusind.com\/iblogs\/manage-your-finance\/credit-card-myths-debunked-separating-fact-from-fiction\/#BlogPosting","mainEntityOfPage":"https:\/\/www.indusind.com\/iblogs\/manage-your-finance\/credit-card-myths-debunked-separating-fact-from-fiction\/","headline":"Credit Card Myths Debunked – Separating Fact From Fiction!","name":"Credit Card Myths Debunked – Separating Fact From Fiction!","description":"We all know credit cards can help you build your credit history, earn rewards, and enjoy various benefits. However, there are also many misconceptions and myths surrounding credit cards that can prevent you from using them wisely and responsibly. In this blog post, we will debunk some of the most common credit card myths and...","datePublished":"2023-08-21","dateModified":"2023-08-21","author":{"@type":"Person","@id":"https:\/\/www.indusind.com\/iblogs\/author\/vinayak\/#Person","name":"Vinayak","url":"https:\/\/www.indusind.com\/iblogs\/author\/vinayak\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/83880c90630f0d98ec7d461acb74bdf6?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/83880c90630f0d98ec7d461acb74bdf6?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"IndusInd","logo":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","width":201,"height":86}},"image":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/134.jpg","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/134.jpg","height":400,"width":1060},"url":"https:\/\/www.indusind.com\/iblogs\/manage-your-finance\/credit-card-myths-debunked-separating-fact-from-fiction\/","about":["Manage your Finance"],"wordCount":1199,"keywords":["Credit Cards","Credit score","credit utilisation","IndusInd Bank Credit Cards"],"articleBody":"We all know credit cards can help you build your credit history, earn rewards, and enjoy various benefits. However, there are also many misconceptions and myths surrounding credit cards that can prevent you from using them wisely and responsibly. In this blog post, we will debunk some of the most common credit card myths and help you separate fact from fiction. Myth 1: Applying for a new credit card will hurt your credit score significantly Fact: Applying for a new credit card may impact your credit score, but not by much. When you apply for a new credit card, the lender will check your credit history to assess your creditworthiness. This is called a hard inquiry, which may lower your score by a few points. However, this effect is usually temporary and minimal, and it can be offset by other factors such as your payment history, credit utilization, and credit mix. Moreover, having more available credit can lower your credit utilization ratio, which is the percentage of your total credit that you are using. A lower ratio can improve your credit score, as it shows that you are not relying too much on debt. Myth 2: To build credit, you must carry a balance Fact: You do not need to carry a balance to build credit. In fact, carrying a balance can hurt your credit score and cost you money in interest charges. Your payment history impacts majorly on your credit score. This means that you need to pay your bills on time and in full every month to show that you are a responsible borrower. Carrying a balance does not help your payment history, but it can increase your credit utilization ratio. A higher ratio can lower your score, as it indicates that you are using too much of your available credit. Myth 3: Canceling your unused credit cards will help your credit Fact: Canceling your unused credit cards may not help your credit, and it can even hurt it in some cases. Closing an account will reduce your available credit, which can increase your credit utilization ratio and lower your score. Additionally, closing an old account can shorten the average length of your credit history. A longer credit history can improve your score, as it demonstrates that you have more experience with managing credit. Therefore, it may be better to keep your unused cards open as long as they do not charge annual fees or tempt you to overspend. Myth 4: Having multiple credit cards is bad for your credit Fact: Having multiple credit cards is not necessarily bad for your credit, as long as you use them wisely and responsibly. A diverse credit portfolio shows that you’re able to handle different types of debt. Furthermore, having more available credit can lower your credit utilization ratio, which can boost your score. However, having too many cards can also pose some risks, such as increasing the chances of missing payments, accumulating debt, and hurting your score with hard inquiries. Therefore, you should only apply for the cards that suit your budget, and avoid opening too many accounts in a short period of time.  Myth 5: Your credit score is automatically affected when you miss a payment. Fact: Missing a payment will not automatically affect your credit score, but it can if you do not act quickly. If you miss a payment due date by a few days or weeks, you may incur late fees and interest charges from your lender, but they may not report it to the credit bureaus right away. However, if you miss a payment by more than 30 days, then it will likely be reported as a delinquency on your credit report, which can lower your score significantly. A single late payment can stay on your report for up to seven years and damage your payment history, which is the most important factor in determining your score.  Conclusion Credit cards are a useful financial tool that can help you achieve various goals and benefits if used correctly. By knowing the facts from the fiction about credit cards, you can make informed decisions and manage them effectively. If you are looking for a reliable and rewarding credit card that suits your lifestyle and needs, you may want to consider the IndusInd Bank credit cards. IndusInd Bank offers a range of credit cards that cater to different segments and preferences, such as travel, shopping, entertainment, dining, and more. You can enjoy various features and benefits with IndusInd Bank credit cards, such as: Low interest rates and fees\u00a0Reward points that never expire\u00a0Discounts and offers on top brands across categories\u00a0Complimentary airport lounge access and travel insurance\u00a0Fuel surcharge waiver\u00a0\u00a0100% digital application with instant approval\u00a0IndusInd Bank credit cards are designed to make your life easier and more enjoyable. So don\u2019t miss this opportunity to get one today. Apply Now Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct\/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Share This:"}