Credit Card Myths
Debunking 4 Credit Card Myths
Myth #1: Having a credit card will hurt your credit score
This is not true. When used responsibly, a credit card can really help your credit score. 10% of your FICO credit score is calculated from your credit mix in use. Your credit mix is made up of credit cards, mortgages, auto loans, student loans, etc. Having a credit card can help to diversify your credit mix and be beneficial to your credit score.
Myth #2: Carrying a balance on your credit card will help to boost your credit score
Carrying a balance on a high-interest credit card can be very expensive in the long run. If you are looking to boost your credit score, you should aim to pay off your balance every month. 30% of your FICO credit score is calculated from your utilization rate, or how much your available credit limit has been used. If you carry a balance it may damage your credit score as this can indicate that you are overextended, and are more likely to miss or make late payments.
Myth #3: You should close that credit card you don't use very often
As mentioned above, 30% of your FICO credit score is calculated from your utilization rate. If you close down one of your credit cards, your overall credit limit goes down. Therefore, your utilization rate will increase and may negatively affect your credit score. However, it may be a good idea to close credit cards you are not using regularly, especially if they have a high annual fee.
Myth #4: You shouldn't apply for the Connected Credit Union VISA Rewards Credit Card
You deserve a better credit card and now is the time. It's the easiest way to manage your lifestyle and you'll earn rewards simply by using it for your everyday purchases like travel, fuel, groceries, and other items. A low interest rate and 24/7 fraud protection, as well as no transfer fees when switching from a higher interest rate card, are just a few of the perks that go along with being a Connected Credit Union cardholder. Go ahead, reward yourself today!
Disclaimer: Any reference made in this blog to a specific product, process, or service does not constitute or imply an endorsement by Connected Credit Union of the product, process, or service, or its producer or provider.
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