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When it comes to complicated subjects, there are always misconceptions and inaccurate information, and credit cards are no exception to this rule. Whether you’re new to credit cards or have had them since you turned 18, it’s likely that you believe one or two “facts” that are incorrect. To help you get a better understanding of credit cards and some of these inaccuracies, we’ve detailed and debunked five credit card lies many people believe to be true.

1. Avoid credit cards altogether

While some believe the best relationship with credit cards is one that’s nonexistent, avoiding credit cards altogether is something that may cause you more harm than good. That’s because many of life’s basics are dependent upon your credit, as it’s one of the deciding factors for nearly every big purchase we make — everything from applying for a mortgage or car loan to opening a cell phone plan or renting an apartment. This means if you don’t have a credit history, you will likely either be charged over-the-top interest rates and fees on that loan or cell phone plan — costing you more money — or be declined to purchase your dream home or rent an apartment.

Instead of completely avoiding credit cards, the key to credit success is to learn how to use them wisely. The first step toward doing this is to recognize that any money you spend on a credit card must be paid back. While this seems like something everyone should know, this doesn’t always translate when we’re face-to-face with that item we’ve been eyeing for months. If it’s something you’re not willing to pay for, you likely shouldn’t purchase it. Mentally preparing yourself for such situations will help you avoid getting into unnecessary debt. Next, learn how a credit card benefits you by using it for any purchase you already budget for, such as your utility bills or groceries. This will not only allow you to use your card and pay off the balance every month (saving you in interest and building a positive credit history), but it may also earn you some perks if you use a rewards credit card.

2. Transferring a balance will cost you

This credit card misconception is probably the worst of the bunch, as transferring a credit card balance can actually save you money. Here’s why: If you have a balance of $2,000 on a credit card with an APR of 25%, you’re paying about $500 in interest per year. When you transfer this balance to a credit card with a lengthy 0% intro APR, you’re automatically saving $500/year, as you won’t be paying any interest for those first 12 months. Even if you select a card with a balance transfer fee, which usually costs 3% of the total, you’re still saving $440 because the $60 is a one-time fee. The key to finding success with balance transfer credit cards is to find a card that gives you a long enough 0% APR to pay off most or all of your balance so you can minimize or eliminate paying interest. For example, if you have a heftier balance, you’ll need more time to pay off the balance so you won’t want to apply for a card with only a 12-month 0% intro APR. We’ve detailed some of the top balance transfer cards below. To find the best card for your particular situation, try our handy Balance Transfer Calculator, which calculates which card will save you the most in interest and fees given your balance and monthly payment.

BankAmericard Credit Card

credit card liesThe BankAmericard Credit Card is a top option for balance transfer credit cards. That’s because cardholders who transfer their balance(s) within the first 60 days of account opening will not only get a 15-month 0% intro APR on balance transfers, but also pay no balance transfer fee for transfers completed in the same 60-day period (after that, the balance transfer fee is 3% or $10, whichever is greater). This 15-month 0% intro APR also extends to purchases, which is nice to have if you plan to make any purchases. The BankAmericard Credit Card also has no penalty rates or annual fees.

Citi Simplicity Card

credit card liesWith one of the longest 0% intro APR we’ve seen, the Citi Simplicity Card is another top option for balance transfer credit cards. Although you will have to pay a balance transfer fee of $5 or 5% of each balance transferred (whichever is greater), you’ll get an 18-month 0% intro APR on balance transfers and purchases — giving you ample time to pay off any hefty balance. In addition to this long 0% intro APR, the Citi Simplicity Card also has no late fees, no penalty rates and no annual fee.

Discover it Balance Transfer

credit card liesIf you want a balance transfer card that will earn you rewards on purchases you make, the Discover it Balance Transfer card is just for you. To start, this card offers an 18-month 0% intro APR on balance transfers and a 6-month 0% intro APR on purchases. While you’ll have to pay a balance transfer fee of 3% of the transferred balance, the card has no annual fee and earns you some great cash back rewards. With Discover it you’ll earn 5% cash back in categories that rotate on a quarterly basis, such as gas, restaurants, home improvement stores, etc. as well as 1% cash back on all other purchases. To sweeten this deal, Discover will double any cash back you’ve earned at the end of your first year — this means if you earn $100, you’ll get $200 back.

3. Only open one credit card

Although it’s definitely easier to manage one credit card, opening only one doesn’t do your credit scores any favors. That’s because having just one credit card may leave you with a high credit utilization ratio, a key component to your credit score that compares your debt to your total credit limit. Not familiar with the credit utilization ratio? Here’s how it’s calculated: Divide the total owed for all of your cards by the total credit limit for all of your cards and you’ll get a percentage of how much of your available credit you’re using. For example, if you have two credit cards (one with a $5,000 limit and one with a $2,000 limit) and you owe $1,000 on the first card and $500 on the other, you’ll divide $1,500 by $7,000 to get about 21% — that’s your credit utilization ratio. Most creditors prefer to see that percentage under 35%, but if you only have one credit card, it may be hard to do, as you have less available credit to add to the equation.

Another aspect to consider is the diversity of your credit reports — something one credit card will not provide. Creditors like to see diversity, as it shows them you can not only balance multiple accounts, but also have a good track record of paying these bills on time (assuming you’re using the card responsibly). Not sure if you can handle multiple credit cards? One trick that you may find helpful is creating a schedule to use the cards. For example, if you have three credit cards, you can use one for a month, then move onto the next and so on as you repeat this pattern throughout the year. With this method, you can keep all of the cards open and active in an organized way, which will help you build a positive credit history. Just make sure you’re aware of which card you’re using so you can be sure to pay the correct one that month.

4. Perks always come with a catch

This is a common misconception that’s shared by people who understand little about credit cards. The reality is that credit cards are pretty straightforward — you open a card and pay the balance either in full (which makes it interest-free) or over time (which means you’ll pay some interest). The confusion usually comes in when rewards are thrown into the mix, as we’ve always been told that most things in life aren’t free so we expect some fine print that will haunt us later on. The main “catch” that users feel get them with rewards cards are annual fees. While some rewards credit cards do have an annual fee, many others do not. The thing that distinguishes these rewards credit cards is the caliber of the rewards you’ll earn, as the rewards cards with annual fees usually earn higher rewards rates.

For example, the Blue Cash Preferred Card from American Express earns users 6% cash back at U.S. grocery stores (up to $6,000/year) — the highest we’ve seen — 3% cash back at gas stations and select department stores and 1% cash back on all other purchases. This card also has a $95 annual fee. It’s fee-less sister card, the Blue Cash Everyday Card from American Express, earns users about half the rewards — 3% cash back at U.S. supermarkets (up to $6,000), 2% cash back at U.S. gas stations and select department stores and 1% cash back on other purchases. If you were to max out the 6% back on groceries with the Blue Cash Preferred Card from American Express, you’ll get $360 back. When you subtract the $95 annual fee, you’ll get a total of $265 back just for your grocery purchases, which is much more than the $180 you’ll get if you max out the Blue Cash Everyday Card from American Express’ 3% back on groceries. The bottom line is if you want a card that earns the best of the best rewards, you’re likely going to pay an annual fee, but if you want a card that earns pretty good rewards, you’ll likely be happy with a fee-less card. Either way, not using a rewards card for your purchases is simply leaving money on the table that you could be putting in your pocket.

5. People with bad credit can’t get credit cards

While it’s true that people with bad credit won’t be approved for most credit cards, there are still options for them. The key to getting accepted for a credit card is applying for the best credit card for your credit score. As such, people with bad credit should be looking at secured credit cards, which are designed specifically to help those with not-so-great credit build a positive credit history with responsible use of the card. Although secured credit cards can be used like a traditional credit card, they function a little differently: When you open a secured credit card, you are required to provide a security deposit, which not only determines your credit limit, but is also used in the event that you default on payments. The security deposit is usually returned to you when you close the card or have built your credit up to be able to move on to a non-secured card. One aspect that makes secured cards special is that the ones we recommend report your payment history to all three of the credit bureaus. This means that if you use the card responsibly, you’ll be able to build a positive credit history rather quickly. If you have bad credit and are looking for a secured credit card, here are two top options.

Discover it Secured

credit card liesThe Discover it Secured card is one of the most unique secured cards on the market, as it offers the benefits of a secured credit card with cash back rewards — something that’s not common with secured cards. To start, your credit line will equal your security deposit of $200 or more, and after you’ve had the card for one year, you can see if you qualify to get your security deposit back early. In terms of rewards, the Discover it Secured card earns you 2% cash back at restaurants and gas stations (up to $1,000 in combined purchases each quarter) and 1% cash back on all other purchases. To top it off, this card reports to all three bureaus and has no annual fee, no late fee on your first late payment and no foreign transaction fees.

Capital One Secured Mastercard

credit card liesWhen it comes to secured credit cards, Capital One Secured Mastercard is another top option. A deposit amount of $49, $99 or $200 (depending on your credit history) is required to open the card and the deposit amount determines your credit limit. Since it reports to all three bureaus, the Capital One Secured Mastercard is a great option (with responsible use) for building a positive credit history, and no annual fee makes it even more appealing, as most other secured credit cards charge an annual fee.

Visit our credit card reviews to learn more about the cards detailed in this post and other options.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.