Are you making all the right moves with your credit cards? Even if you have a good handle on your finances, you might not realize how certain actions could impact your credit and make it more difficult to get loans in the future until it’s too late. Here are 9 common myths:

Myth #1: Debit and Prepaid Cards Can Help You Build/Rebuild Credit

Debit and prepaid cards are convenient, but they don’t help your credit score. If you need to build or rebuild your credit and you don’t have a credit card, a secured credit card can help you do just that, if you use it responsibly.

Here’s how a secured credit card works. You make a deposit in a savings account, and if approved, you’ll be issued a line of credit equal to the deposit amount. Then, the card works like any other credit card. As you make payments on the money you’ve borrowed, you’ll be building or improving your credit score. You may even qualify for better rates and become eligible for an unsecured card.

Myth #2: Using Credit Cards Leads to Debt

It’s true that if you overspend, you can end up owing a lot of money. But, when used responsibly, credit cards can be a useful tool for paying expenses and building credit. They’re especially helpful if you have a big unexpected expense and don’t have the money to pay for it. Plus, many cards come with benefits like cash back and points, which means money back in your pocket. And, if you ever want to buy a home or car, showing that you can handle making payments on time every month will put you in a better position when you apply for financing.

Myth #3: Never Have More Than One Credit Card

Having multiple credit cards won’t hurt your credit as long as you manage them responsibly. In fact, having more than one credit card may even help your credit utilization ratio (the amount of credit available to you compared to how much of it you’ve used).

Here’s an example. If you have a $1,000 limit on one card and $2,000 on another, your available credit is $3,000. If, between the two cards, you owe $750, you have a credit card utilization ratio of 25 percent, which is good. (Experts suggest keeping your utilization below 30 percent, so for this example, that would mean keeping what you owe on the two cards combined to below $900.)

Myth #4: Don’t Open a New Card Without Closing an Old One

This isn’t true, and in fact, closing old cards might actually hurt your credit. Having a longstanding credit card that also shows a long history of on-time payments demonstrates that you’re responsible, helps your score and makes you more attractive to lenders. So think twice before closing your oldest account.

Myth #5: A Few Late Payments Won’t Hurt Your Credit

When you borrow money, your repayment history will be reported to the credit bureaus. That means late or missed payments show up on your credit report and lower your score. Making on-time payments consistently is one of the single best ways to boost your score.

Myth #6: Carrying a Balance on Your Credit Card Helps Your Credit Score

What helps your score most is making on-time payments every month, whether you’re making minimum payments or paying the balance in full. You should use your card regularly, but you don’t necessarily have to carry a balance. If you do, just make sure to keep it low, because the higher your balance, the more interest you’ll pay over time.

Myth #7: Your Credit Card Interest Rate Can’t Be Reduced

Your interest rate is based on a number of factors, including your credit score, credit history and current rates available. If your credit score has improved, you may be eligible for a lower rate. It doesn’t hurt to ask for a rate reduction.

Myth #8: Increasing Your Credit Limit Hurts Your Credit Score

It’s true that a credit limit increase might not be the best idea if you’re likely to charge more than you can afford to repay. But, having a higher credit limit actually could help your credit utilization, which directly impacts your credit score.

Myth #9: Checking Your Credit Report Lowers Your Credit Score

Checking your report doesn’t lower your score—doing so may actually save it. Errors in your report can hurt you, especially if you become a victim of identity theft and don’t know it. You’ll be doing yourself a big favor by reviewing your credit report. You’re entitled to a free credit report every year at

Choosing the right credit card and using it wisely can help you take control of your finances. Explore Navy Federal Credit Union's credit cards to find one right for you.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.