5 common credit card myths you should not believe
New Delhi | Jagran Business Desk: Over the last few years, credit card has emerged as one of the most popular payment tools among Indian consumers. As of 2019, India had more than 50 million credit card users, a number that keeps inching up steadily. A credit card not only saves you the trouble of carrying cash but also allows you to pay for purchases in convenient installments.
Besides, most of these cards offer monetary rewards on grocery purchases, online shopping, movie ticket booking, among other products and services. However, there are many misconceptions associated with the financial instrument that dissuades consumers from using them. Let us look at the five prevalent misconceptions about credit cards that need to be busted.
Credit Cards can make a person spendthrift
One of the most widespread misconception surrounding credit card is that it can make a person spendthrift and harm his financial health. The fact is that any line of credit requires responsible spending, and in the case of credit cards, a disciplined approach can inculcate huge value to your overall financial health.
Cardholders should avoid credit limit enhancement
Most credit card holders fear that enhancing their credit limit will lead to increased spending and subsequent debt. A better way to look at it is that an increased credit limit can help you meet immediate financial emergencies if you find yourself trapped in one.
Having too many cards can complicate your finances
No single credit card can tie up with all leading brands and service providers. By restricting yourself to a single credit card, you may be missing out on attractive deals on products and services on different brands and retail stores.
Old credit card should be closed to avoid hurting you CIBIL
Among several other factors, your credit score also takes into account the age of your credit history, or how long you've been using credit. So it may be a better idea to hold onto your old cards. Furthermore, it goes without saying that closing any of your cards will reduce your credit limit.
Late credit card payments are inconsequential
While the first four points were about the irrational fears of falling into the credit-card inducted debt, this one should be taken as a warning. Even a single credit card payment can affect your credit score. Late payments are not inconsequential. They attract heavy penalties and decrease your credit limit.
Posted By: Lakshay Raja