Credit cards have been a common form of payment for a long time, but some consumers still have skepticism about credit cards, mainly due to fear of indebtedness.
Did you think you know credit cards?
There are usually two reasons for this: either you know someone who has a lot of credit card debt, or you don’t know how credit cards work.
Here are 10 common misconceptions about credit cards:
1. Credit card means more debt
The credit card is not meant to live in debt. If you pay the invoice in full by the due date, you will not have to pay interest on the credit. If you do not pay off your entire credit card debt but only part of it, you will have to pay interest on your credit until you pay the balance.
If you are afraid of over-indebtedness, you can set a credit and usage limit for the card according to your income so that you do not overuse your credit card.
2. Choosing a credit card is difficult
If you do not know which card will work best for you, you can compare different card options and choose the one that best suits your credit card. If you travel a lot, you might want to get a credit card. On the other hand, if you want to focus your purchase on a particular store, consider a store earning a bonus card.
In our comparison it is easy to compare different cards. You’ll also see all card costs and search criteria:
3. The credit card interest rate is too high, so you should not use the credit
Credit cards have an average 30-day non-interest payment period. As mentioned earlier, if you pay the invoice in full by the due date, you will not have to pay interest on the credit. Payment cards (such as American Express and Diners Club) must always pay off the invoice in full each month, so there is no interest.
4. Credit card debt is common
There are three typical reasons for indebtedness:
- Forgetting credit card bill payment
- Exceeding credit line
- Don’t keep up or follow your own spending
If you use the card carefully, keep track of your own expenses, and remember to pay off your bill by the due date, you won’t have to worry about getting in debt.
5. Paying the invoice by the due date is easy to forget
Almost all banks can easily and conveniently pay for your credit card bill through online banking and track your card spending. For example, you can schedule a payment to your credit account in advance if you are afraid of forgetting to pay the invoice by the due date.
6. A debit card is a better and more secure option than a credit card
Vice versa. Paying with a credit card has more advantages than paying with a credit card, in addition to the non-interest payment period. Credit cards often include Payment Security and Product Security, which compensates for losses in the event of misuse or, for example, the purchase of a defective product. Bankcards, on the other hand, do not include these benefits.
Credit cards also offer bonuses such as points that credit cards do not. For example, with a St1 credit card, you get a payment benefit of 0.5% for each purchase, and a payment benefit of 2% for St1 and Shell stations.
7. If I get a credit card, I need to open a new bank account for the card
This is not always a requirement. Some payment and credit card issuers offer cards without opening a bank account, and you can pay your credit card bill from your current bank account. For example, Diners Club and American Express are payment cards that do not require you to open a new bank account.
Cards have an average 30-day non-interest payment period and you can pay the invoice directly from your account.
8. Credit Cards Have a Lot of Hidden Costs
When applying for a credit card, you should be aware of the terms and charges associated with the card. Carefully read the small print of the agreement and find out any additional charges (such as annual fees or monthly account fees).
In our credit card comparison, you can easily compare the annual fees of different cards with other charges and benefits.
9. Credit Card Scams Are Common
If you are careful with the use of your card and keep your card and key figures safe, the risk of credit card fraud is extremely low. However, if you notice an abuse on your card, contact your bank / credit card provider immediately and report it.
Your credit card company or bank can block the card and possibly refund you if fraud is discovered. With a debit card, things are not that easy.
10. I’m afraid I’ll use too much credit if I get a credit card
This is completely up to you. If you are afraid of using your credit card too much, you can choose a lower credit line, for example, which is less than your income. You can also leave your credit card between them, as you don’t always have to carry it with you.
In some situations, such as traveling abroad, a credit card is particularly useful!