Debunking Credit Card Myths: Separating Fact from Fiction


Credit cards have become an integral part of our financial lives, offering convenience and flexibility. However, with their widespread usage, numerous myths and misconceptions have emerged.

Myth 1: Closing a Credit Card Will Improve Your Credit Score:

Many people believe that closing a credit card will automatically boost their credit score. However, this is far from the truth. In fact, closing a credit card can have a negative impact on your credit score. It reduces your overall available credit and can increase your credit utilization ratio, which is a key factor in determining your creditworthiness.

Myth 2: Carrying a Balance Helps Build Credit:

Contrary to popular belief, carrying a balance on your credit card does not help build credit. In fact, it can lead to unnecessary interest charges. To build credit, it is important to make timely payments and keep your credit utilization ratio low. Paying off your balance in full each month is the best way to establish a positive credit history.

Myth 3: You Need Multiple Credit Cards to Have Good Credit:

Having multiple credit cards does not necessarily improve your credit score. It is more important to have a few well-managed credit accounts than a large number of cards. It is recommended to have a mix of credit types, such as a credit card and a loan, rather than solely relying on multiple credit cards.

Myth 4: Using a Credit Card Means You’re in Debt:

Using a credit card does not mean you’re in debt. It is simply a payment method that allows you to borrow money for a short period. If used responsibly, credit cards can actually provide benefits such as cashback rewards, travel perks, and fraud protection.

Myth 5: Closing Old Credit Cards Will Erase Their History:

Many people believe that closing old credit cards will erase their payment history. However, your credit history remains on your credit report for a certain period, typically up to 10 years. Closing old credit cards may impact your credit utilization ratio and the average age of your credit accounts, which can affect your credit score in the short term.


It is crucial to separate fact from fiction when it comes to credit card myths. Closing a credit card does not improve your credit score, carrying a balance does not help build credit, and having multiple credit cards is not necessary for good credit. Using a credit card responsibly can provide benefits without leading to debt. Lastly, closing old credit cards does not erase their payment history. By understanding these myths, you can make informed decisions and effectively manage your credit cards.

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