Since credit card debt is one of the most commons forms of debt out there, it’s understandable that a large percentage of the population may not be inclined to use them. In fact, plenty of millennials are ditching credit cards altogether, relying only on debit cards and cash.
Despite this, credit cards are a useful tool in building a healthy credit history and managing our finances. If you’re one of those people who feel like getting a credit card is a scary debt trap, it might be due to your belief in some common misconceptions about credit cards. In that case, we’re here to debunk those myths so you can separate fact from fiction.
A Debit Card Is as Good as a Credit Card
A bank card is a handy way to not have to carry all your cash with you, sure. And using a debit card to do this is just fine. But by no means is your debit card equally as good as a credit card when it comes to certain uses.
One important advantage that credit cards have over debit cards is in keeping you safe from fraud. A fraudulent or suspicious transaction can be cancelled much faster and easier when done via credit card than with a debit card. A debit card purchase is almost completely irreversible and even if you can prove that a fraudulent charge has taken place, it’s unlikely that you’ll get your money back. We feel this key security feature is already an excellent reason to use credit cards on top of the rewards, discounts, and promotions routinely offered by various credit card issuers.
Having Only One Credit Card is Enough
In a perfect world, this would be true. You would just need one credit card that you can swipe anywhere and gain rewards for any purchase you make. However, not all merchants accept all kinds of cards from any issuer. First of all, there are places that accept Mastercard and not Visa, and vice versa. This is already a good enough reason to have at least one of each.
Another reason is that plenty of credit cards reward you for specific purchases and swipes. Which means if you want every swipe you make to award you with airmiles, cash back, and goodies, you probably need to shop around for more than one card.
Your Purchases Get Charged Interest Immediately After Paying
Credit cards do come with an interest rate, but this interest is not charged immediately upon you swiping the card. That is to say, the price of what you pay for doesn’t automatically increase by the percentage of your interest rate. You only have to pay your credit card interest on the outstanding balance you still have on your card.
This means that as long as you spend carefully and pay off your credit card bill in full each month, you won’t have to pay any interest charges at all. But even if you do, these charges only appear on your credit card bill at the end of the month, leaving you time to manage your finances to prepare for paying it off if you do happen to spend more than what you have in your account at the moment.
Credit Cards Are Expensive
Credit card debt can be a heavy financial strain is handled improperly, yes. But credit cards themselves are not expensive. In fact, applying for one, getting it approved, and activating the card for the first time do not require any additional starting fees.
Some credit cards do however have an annual fee, but you can shop around for cards that have a low annual fee or even for cards that have zero fees that you have to pay every year. As long as you’re using (and choosing) your card responsibly, owning one is not very expensive at all.
Never Get Credit Cards with Annual Fees
It’s true that high annual fees are a bad thing if you want to keep your bill payments low. But just because a credit card has annual fees doesn’t mean it’s automatically a card you should avoid. Often, the cards with higher annual fees are cards that offer you attractive cash back, rewards, and air miles.
These rewards not just offset the costs of you swiping your card, they also mean you get appealing discounts and promotional items by just doing your regular shopping. To be sure you’re getting what you pay for in annual fees, we recommend you do your homework and visit our comparison page to determine which cards you can really use the most to maximise your rewards.
Credit Cards Are Not the Enemy
Despite the horror stories you may hear about people in credit card debt, you should know that credit cards by themselves are not to blame. As with any kind of financial product, as long as you use it prudently and are responsible with them, you should be just fine.
If you’re looking for the best credit cards that Standard Chartered has to offer, check out their page on RinggitPlus and select from their range of cards that are packed with features, with more than 1,000 deals nationwide!