It’s time to stop misconceptions and think that credit cards were invented by the devil to put you into huge debt.
Some people are scared to death of credit cards. This is usually for 2 reasons:
- When they know someone who has succumbed to debts because of them or
- Someone who does not know how they work.
Some of these preconceived ideas are really absurd. Here are the most common misconceptions about credit card:
1. Credit Card = Debt
You will only be in debt if you don’t pay your credit on time. More emphasize on the word “on time”. Once the due date has passed, if you have unpaid balance, you will have to pay interest.
2. The interest is too high!
Again, they are high if you don’t pay your bills on time. When you make a purchase with your card, you get an interest-free period, called a “grace period”, which varies depending on your bank. Interest will be added to the payment of your credit after this period. This is something you want to avoid unless you want to have debt.
On the other hand, a deferred debit credit card is directly linked to your bank account and allows you a deferred payment of your purchases for a maximum of one month, without paying interest.
3. My friend/relative got into a lot of debt over credit cards
There are three reasons why people accumulate so much debt with their credit cards. They keep forgetting to make refunds. They’re over their card limit. They don’t keep track of their expenses.
If you are a responsible person and pay attention to your expenses, there is no reason to worry about having a credit card.
4. I’m gonna forget to pay off my credit
Banks would love card user to forget making repayment. But most banks have online banking systems that allow you to access your account with a single click and make payments on time. Too easy, isn’t it!
5. A debit card offers me the same benefits
Wrong. Credit cards offer you many benefits, such as miles, cashback, points, or insurance that you do not receive with a debit card. Finally, it will be impossible for you to plead lost money at your bank in the event of debit card fraud.
6. I don’t want to have an account with that bank just for the credit card
The good news is you don’t necessarily need it. In many cases, you can get a credit card with Bank A without opening an account with the same bank. In that case, you can pay your balance from your account with Bank B. So who says, it is complicated?
7. Credit cards have hidden fees
This is absolute rubbish. Credit cards have terms and conditions that you need to know to understand what you are signing up for. It’s like when you read Facebook’s terms and conditions when you create a new account.
8. Credit cards are not secure
First, when you are careful, you are very unlikely to be a victim of credit card fraud. But if this happens to you, the banks may block the transaction or even refund you. This is not possible with a debit card; what is lost will never be recovered.
9. A card like this is gonna make me spend more
It’s all about the state of mind. If you think you will spend a lot with your card, you can choose one with a smaller limit. For example: an amount less than your salary.
10. I don’t know which one to choose
There are many credit card comparison tools available online that allows you to compare between several cards very easily. You can also compare on websites of different financial institutions and find the financial product that suits you best.