Top 3 myths about credit cards.
We know that credit cards are a popular way to buy stuff today and pay for them later.
They’ve also been around for a long time, and some general misconceptions have come up about them over the years.
Here, we get into a few of the myths about credit cards. (You learn something new every day.)
Myth 1: Checking your credit score can negatively impact it.
When you check your credit score, it creates a soft hit on your credit report, which doesn’t negatively impact your score. However, applying for things like a credit card, loan or mortgage requires a hard hit, which can in fact have an impact on your score.
Tip: You can stay informed about your credit score for free with Credit Keeper¹ from Capital One. Interested in knowing why your credit score is important? We explain it in our blog, “What’s in a credit score?”.
Myth 2: Secured cards aren’t “real” credit cards.
Not true! A secured card works like any other credit card, except that security funds are required as collateral to show you’re committed to using your card responsibly. Account activity on a secured card is reported to the credit reporting agencies on a monthly basis, which is why it’s important to make your payments on time and stay below your credit limit. Positive credit behaviour is essential to building your credit score, and a secured card is a great first step.
Myth 3: Good credit happens overnight.
Sorry to disappoint, but that isn’t possible. Building your credit takes time and dedication. So start now! Sure, it won’t happen overnight, but being responsible with your credit card – staying under your limit and making your payments on time – is one of the best ways to build your credit score. The Guaranteed Mastercard® from Capital One is a great option if you’re looking to build or rebuild your credit, and we have some great resources here on Life & Credit to support your goals!
Learn more about how credit cards work, and get inspired about managing your finances.
¹ The credit score and report information is intended for educational purposes only. Lenders and other commercial users may use a different type of credit score and other information when making credit decisions. Availability may vary depending on our ability to verify your identity and obtain your information from TransUnion. Credit Keeper is also currently unavailable to Quebec residents.