Common Credit Card Myths: [Debunked]

#1. FEAR & SHAME (of going into DEBT)

The number one response I hear from people who are skeptical about credit cards is, “They want you to get their card so that you will go into debt and have to pay them interest.” There are two issues to deal with here and they come from fear and shame.

Fear of going into debt is what comes from not stewarding well. There is no reason you should ever have to go into debt with a credit card unnecessarily. We will never advocate for racking up unnecessary expenses on a credit card and if you use your credit card as you would cash or a debit card then you have nothing to fear. I pay my cards off a couple times a month for three reasons: 1.) So that I am aware of what I am spending 2.) It helps to improve your credit score if you keep your balance low even if the payment is not due. 3.) Many people get paid weekly which makes it easier to pay off your card each week rather than a big amount all at once, down the road.

Shame from being in debt is real. Three weeks ago I was coaching a friend with his credit journey and he was telling me about all the improvements he has made since we started working together. Then he said this, “It has been so encouraging for me to have your help with this because it is something many people struggle with, but nobody talks about.” Listen, this is exactly why we use this blog – to connect with you personally and walk alongside you, so that together we can Do Good, Steward Well, & Travel Free! That means free of fear and shame too!

“The good news is that I have been freed from an incredible amount of debt and so can you.”



IF YOU are in one of these two places of fear or shame, please send us a message so we can get in the pit with you!

#2. INTEREST (the reason they want you to apply)



It may help to know that credit card companies don’t make all of their money through the interest you pay when you go into debt. Credit card companies are not trying to deceitfully lure you into a trap of paying them interest, because they make vast amounts of money in ways that don’t even effect you. One of the main ways they make profit is from stores that allow you to pay with a credit card. For example – Kohls pays American Express a portion of their sale every time anyone swipes an American Express credit card. This is why many cards come with a big cash bonus for you if you spend a certain amount within a given period of time. Card companies want you to swipe their card rather than another banks card because they receive a portion of the retailers sale when you do so.

#3. TOO MANY CARDS HURT YOUR CREDIT SCORE

The statement that, “too many credit cards is bad for your credit score” is actually opposite of the truth. The more accounts you have, the better your score is. When you apply for several cards in a short period of time it may lower your score a few points for a short time but your score will increase quickly as you have added more accounts.

– from Credit Karma

#4. CARRYING A BALANCE HELPS YOUR CREDIT SCORE

  • FALSE. You should never carry a balance if you don’t have to. As long as you are using your cards as normal (for everyday purchases) then there isn’t any reason to leave a balance on your card even if it has 0% APR. 

#5. LINE OF CREDIT IS THE AMOUNT YOU CAN SPEND

FALSE. Just because your credit card says you can spend up to $4,000 does not mean you should spend that all at once. In fact, you should never really spend much more than half of your credit limit at a time. This means that if your line of credit is $4,000 then you shouldn’t spend more than $2,000 – $2,500 before you pay off the balance (even if the balance isn’t due until later). Once you pay it off you are free to spend on the card again. If you have a low credit limit and need to spend more on your card, think of applying for another card if it makes sense for you. Or you can call the bank and ask for an increase in your line of credit.

#6. CLOSE OR DOWNGRADE UNUSED CARDS

When should I close an account?

It is not always true that you should close a card that you are no longer using but, if you hold a card with an annual fee that you aren’t getting value out of then it could be better to close the card rather than downgrading.

When should I downgrade an account?

If you have a card that you aren’t using, it can help your length of credit history to keep it even if you never use it. Moreover, if you downgrade an account rather than closing it, then there is a possibility that the downgraded card will show up as a new account on your credit profile.

If you’re considering doing one of these two things but don’t know which option is better for your situation, just ask us in the “comments” section or send us an email.

#7. CREDIT CARDS WILL HURT YOU

Credit cards can’t hurt you unless you use them incorrectly rather than as tools to help yourself. It is like saying that drinking water will harm you. Water actually helps you unless you drink too much of it.

So jump in! Stay informed! And don’t be afraid to give it a try!

We will be here to help you:

Do Good.

Steward Well.

Travel Free.

Published by

Points On Purpose

Credit cards can be scary for everyone, especially if you are like I once was, struggling with your credit history and confused with how it works. Two years ago my friend, Aaron Jackson, helped me transform my credit eligibility. When I started I had 13 collections, low 500’s credit score, and ZERO credit history. After several ignorant credit card application denials, I set out to learn how to repair and build my credit so I could start raking in big credit card bonuses. My credit score is now 791, I have 10 credit cards in my name, zero collections, and am saving thousands of dollars simply by using credit cards to rapidly gain points, miles, and cash. You can see why I am passionate about this and why I want you to experience the same help that was given to me. I understand it can be embarrassing to talk about your credit record, but we've all been there and that is why we are HERE! - Dusty

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