Credit Card Myths

For amny people who are in financial distress credit cards play a major role. Here are a few misconceptions and myths about credit cards.

Myth: I wouldn’t be pre-approved for a credit card if they didn’t think that I would be a responsible customer.

Fact: Pre-approved offers are not based on your individual credit worthiness. Offers are sent to hundreds of different people based on a mailing list. So that special rate that you think you are getting is also going to a few thousand others. These offers usually lead people who are already in credit card debt to acquire another unnecessary card.

Myth: My credit is fine because I pay the minimum payment on time each month.

Fact: Even though you may be preventing any credit damage you are wasting a lot of money by only paying the minimum. By only paying the minimum you are allowing interest to continue to stack up on any remaining balance. The best thing you can do is to pay your amount in full each month. If you are unable to do so, any amount more than the minimum will help you cut your pay back timeframe and save you thousands in interest. If you pay less than the minimum than you can be charged with late fees on top of the accruing interest.

Myth: If I cut up my credit card the account is closed and there are no more worries.

Fact: Cutting up your card is a good way to physically restrain you from using the card, but that account will still be open. Sometimes an unused open line of credit can be damaging to your credit. You need to call the company and request that the account be closed. You are still of course responsible for any of the remaining balance and/or other charges associated with that card.

Myth: Card companies will contact you and ask for your credit card number and social security for identification.

Fact: You will never want to give this information to anyone that contacts you. You will sometimes be asked your social security number to bring up an account or to verify identification. If someone calls you and requests this type of information ask for their name and contact number. Then you will want to use the number you have for the company and call them back. Only give this information if you know exactly with whom you are talking to.

This is the same with any emails that you receive. Don’t send this information over the Internet. Again, use the phone number you have for them (either on the back of your card or on your statement) and contact them to confirm the information they requested.

Myth: If you can’t afford a payment it is useless to call them because they won’t believe you and will think that you are making excuses.

Fact: You may have had run-ins with less than polite collectors in the past, but don’t let this deter you from contacting them BEFORE your payment is due to discuss your options. Each company has different programs that can help you get back on track. If you do come across someone who is not helpful, request to speak with someone else until you can talk with someone who will reasonably discuss your options with you. Their ultimate goal is for them to get their money back and if they have to assist you they usually will.

Myth: If I’m heading to college I should never get a credit card.

Fact: Credit cards can actually be beneficial if used responsibly. By getting a credit card you are establishing your credit. So if you or a loved one is heading to school it may be a good idea to find a card with a low interest. By not having a credit history you may not be able to get a loan, a cell phone, or even an apartment, as these all require a credit report check and like the saying goes “no credit is just as bad as bad credit.” By using the card and paying it in full each month you will be establishing good credit that will benefit you in the future.

Myth: I should use cash advances on my card to help me pay for other bills.

Fact: Using cash advances to pay other bills is basically throwing away your money. With interest and fees that are charged cash advances cost you a lot more than the original amount that you take out. If you are using credit cards to pay other bills you may get caught in a continuing cycle of debt.

Pioneer Credit Counseling is a bonded, non-profit credit counseling agency offering debt management programs, financial counseling, bankruptcy counseling and housing counseling nationwide. Call our friendly counselors today at 800-888-1596 or visit

Our accredited credit counselors will help you take control of your financial life and get out of debt faster than you can on your own. We offer a debt management program that will stop the collections calls, lower your monthly payment and provide you peace of mind. Our pre and post bankruptcy counselors provide an easy process for you so you can focus on rebuilding your financial being.

It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.

Pioneer Credit Counseling can help you get out of debt faster. Find out how through one of our Debt Management | Debt Management Programs | Credit Counseling | Financial Counseling | Housing Counseling | Bankruptcy Counseling | Financial Educational Materials

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