Four Credit Card Myths You Should Stop Believing

Written by: April Lunar
07/24/2019

credit-cards-myths

There are many myths that credit card holders are led to believe. Some of them are plain simple but could unknowingly cause damage to credit rating. In this article, we share some of the most common credit card myths. There are also several tips that users could utilize as their guide so they could use their credit cards to their advantage. 

Myth #1: Writing The Words See ID On The Signature Line At The Back Of The Credit Card Will Keep Credit Card Thieves From Using Them.

This is one of the most common credit card myths that many credit card holders believe even in this day and age of advanced technology. The See ID or Ask for ID is actually a reminder to sales people to verify that the name on the credit card really matches to the identity of the person holding the credit card. Unsigned credit card is technically invalid based on the agreements that card issuers and retailers have. However, these days, card holders can simply swipe their credit cards without the cashier even paying attention at the cards.

Normally, if you give the sales clerk an unsigned credit card or the one that bears the words See ID, the sales clerk is supposedly going to check the signature against your driver’s license or passport. Many are wondering if the See ID lets you get off with the potential liability for card fraud if the credit card is stolen from you or used. The answer is no since cardholders are still going to pay for the $50 fraudulent amount charged in the event that the card is stolen but there are credit cards that offer no liability for fraud or theft. 

Myth #2: You Have To Pay The Annual Fee To Avail A Credit Card

One of the main reasons that many people do not want to have a credit card is because they do not like to pay for the annual fee. But, there are several credit cards that do not require annual fees. Some of them provide a wide range of perks. The truth is, you do not necessarily have to pay for the annual fee for your credit card.

In fact, you can always negotiate for the annual fee even if your credit card requires you to pay. There are companies that waive the annual fee if you request for it. You can call your credit card provider whenever you see the charge on your monthly statement; you can ask the provider to remove it. There are providers would simply want to make sure that you are happy with their service and would not want you to switch to another credit card provider.

This is the reason why the provider’s customer support could easily waive the annual fee if you threaten them to cancel your card. While not all providers allow this, it could still be worth a shot. 

Myth#3: You Should Always Carry A Balance On Your Credit Card And Just Pay The Minimum

This is one of the most dangerous and pervasive credit card myths that many people believe. Many credit card holders give this as a piece of advice confident that it will help with the card holder’s credit rating. However, the truth is, carrying a balance will not in any way help with anyone’s credit rating. It actually lowers the credit score since not paying the full balance increases the credit utilization ratio.

One of the arguments that some credit card holders hold for keeping a balance on their cards is to let the lenders know that they are actually using their cards. While it is true that you have to keep your card active it does not mean you have to keep a balance. You can keep your credit card active by using it once every three months.

The truth is it is always recommended to pay off your credit card in full each month. It is dangerous and a bad idea to only pay the minimum amount due each month because it could balloon interest payments. It is recommended to maintain a low balance comparative to the amount of one’s total credit. The recommended credit utilization ratio according to experts is below 30 percent. 

Myth #4: Do Not Use Your Credit Card On Online Transactions

Some credit card holders believe that using credit cards for online transactions is very dangerous because of the possibility of the information being stolen. However, it is safe to transact online using a credit card provided that you observe the necessary precautions. It is far better to use a credit card than a debit card when shopping online.  If there are sham purchases made on your credit card it can be easily reversed by calling your card provider, which is difficult to do in a debit card. Credit cards, when used sensibly could be a great way to transact online. 

Effective Tips To Safely Shop Online

There are many things that you have to take into consideration when you do online purchases or conduct online transactions. First, always check the ID of the browser and make sure that it has https:// at the start of the web address. This is a very important feature of any website as it means that it is capable of encrypting the data you key in.

Another important thing is to do online shopping using your own personal computer on a private network connection. Never use a public network when shopping online as you are risking of being exposed to hackers who have the ability to intercept your information on a Wi-Fi connection. If you have a Visa card, make sure that it is VBV or verified by Visa.

This feature adds an extra layer of protection every time you shop or do transactions online. The Verified by Visa feature utilizes passwords to verify the identity of the credit card holder. With countless online hackers, attackers, and scams these days, it is always safe to have this feature on your credit card.

Another important thing that you should be extra careful is on giving out your personal data to anyone. This includes your full name, birthday, and address. There are times these hackers send email in the guise of a verification letter to solicit important information from credit card holders. Make sure to verify first the email address of the sender before giving out your information, better yet, call the customer service hotline of your credit card provider before doing anything. 


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Four Credit Card Myths You Should Stop Believing

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