Credit cards

Credit Card Myths

InvestigateTV – When it comes to your credit score, there are many misconceptions.

About half of all Americans think having a small balance on a credit card is better for a credit score than paying off the balance in full each month. It’s a myth.

Sara Rathner, personal finance expert at Nerdwallet, says you’re just paying interest unnecessarily.

“It shouldn’t cost you money to increase your credit score over time. You can do this for free by paying your credit card bills in full, on time, every month,” Rathner explained.

Another myth that Nerdwallet uncovered in a recent survey is that nearly two in five Americans think checking their own credit score could lower it – which is not true. Checking your score is important to do and many tools exist to allow you to do it for free.

Half of Americans think closing an old card you no longer use is good for your credit score. It’s a myth.

“It’s so tempting to declutter your wallet if you don’t want to carry around all that extra weight, but it might be worth keeping an old credit card open even if you don’t really use it much,” Rathner added.

If that old card charges an annual fee, call the issuer and see if there’s a card with no annual fee you can transfer your account to. Having a long-standing credit card, even one you never use, improves your credit score.