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.