Busting Common Credit Card Myths

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There may be much information written about credit cards but unfortunately, there are still many cardholders who are left in the dark. In this article, we will discuss several credit card myths.

Myth 1: All rewards cards are the same

There are some rewards cards that offer similar types of benefits but the reality is that there are so many kind of reward cards out on the market today. Because they are popular among customers, all card companies are continuously looking for ways to cater to each customer’s individual needs. Hence, there are cards that offer free miles for people who love to travel, gas or grocery incentives for people who like to use their card to purchase everyday items for incentives, reward cards for those who love shopping for clothes, etc. If you are searching for a good reward card, make sure to choose one that fit your lifestyle the best. This way, you can maximize the incentives it offer.

Myth 2: Card companies will not increase your rates unless cardholders defaults on their payment

This is one of the many instances where you need to read the terms and conditions. The fact is, there is nothing that can stop companies for increasing rates, they will raise their rates for no reason at all. This is the reason why cardholders who refuse the changes are given the choice to opt-out or to close the account.

Myth 3: Your credit will not be affected until you activate the credit cards

The fact is that you affect your credit as soon as you submit your application to credit companies because this gives them the chance to pull your credit report. As soon as your application is approved, the card is active regardless where you activated the card or not.

Myth 4: Retailers will always require some form of identification to validate your credit cards

Technically, some business establishment ask for IDs when using credit cards. However, some cards do not require you to present IDs, the signature at the back of your card are enough to validate your purchases. It may be tedious but asking for other identification to confirm every transaction is used as preventive measure against fraudulent activities.

Myth 5: There are some cards that has no spending limit

Here is a fact, while it is true that there are some cards presented by credit card companies as having no limit, note that these are nothing more than just marketing schemes. What these cards have are flexibility not offered on average credit cards, not endless spending limit. Some company base the individual limit they impose on cardholders on their spending habits. Once they see that you made higher-than-usual purchases, they may cut your card off, not because they are assuming these are fraudulent activities but because they think it is beyond your usual spending pattern. Although some cards offer generous credit limit, there are still limitations on these cards.

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Tina Lee-Almazar | Tinaciouslee

Tina Lee-Almazar is a writer and editor based in the Philippines. She holds a Bachelor’s degree in Broadcasting from Centro Escolar University in Manila. She started out as a production associate at ABS-CBN Broadcasting Network in 2004 before transitioning to creative writing in 2006. Her years of experience as a writer resulted in having considerable knowledge in a variety of writing fields. When she’s not surrounding herself with pretty things or discussing herself in the third person, Tina watches funny cat videos all day.

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