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Are you making all the right moves with your credit cards? Even if you have a good handle on your finances, there are a lot of misconceptions about how certain actions could impact your credit.

9 Common Credit Card Myths

  1. Myth #1: Using Credit Cards Leads to Debt
    There’s no penalty for paying your credit card off every month. When used responsibly, credit cards can be a useful tool for paying expenses and building credit. Many cards also come with benefits like cash back and points, which means money back in your pocket. 
  2. Myth #2: 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 that’s what you’re looking to do, a credit card can be a great tool to achieve that. Using the card responsibly and making on-time payments each month can help improve your credit. Over time, you may even qualify for better rates. 
  3. Myth #3: Never Have More Than One Credit Card
    Having multiple credit cards may not 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, which is the amount of credit available to you compared to how much of it you’ve used. (Experts suggest keeping the ratio below 30 percent.)

    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 you owe $750 between the two cards, you have a credit utilization ratio of 25 percent, which is good. 
  4. Myth #4: Don’t Open a New Card Without Closing an Old One
    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. 
  5. 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 may lower your score. Making on-time payments consistently may be one of the single best ways to boost your score. 
  6. Myth #6: Carrying a Balance on Your Credit Card Helps Your Credit Score
    What may help your score 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. 
  7. 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. If your credit score has improved, you may be eligible for a lower rate. It doesn’t hurt to ask for a rate reduction.
  8. 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. However, having a higher credit limit actually could help your credit utilization, which may impact your credit score.
  9. 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. If you’re a Navy Federal member, you can easily find out if you prequalify for one of our cards. Explore Navy Federal Credit Union's credit cards to find the right card 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.