Using credit cards is the norm; in fact, 82% of adults had a credit card in 2023, according to a Federal Reserve report. From swiping your card to buy groceries and paying for your favorite streaming service online, you likely use a card most days.

Despite how common credit cards are, many pervasive misconceptions about credit cards persist. These myths can lead to costly mistakes, so to help you understand exactly how cards work, we researched and debunked six of the most common credit card myths.

Myth #1: You have to carry a balance to build credit

It's a common tip: If you want to establish good credit or have the best possible score, you should carry a balance on your cards. Rather than paying off the statement owed by the due date, you only pay the minimum or a portion of the outstanding balance. The remainder that you owe rolls over into the next statement period.

However, carrying a balance isn't required to build good credit. In fact, how much available credit you use — the credit utilization — is a major factor affecting your credit, determining 30% of your FICO credit score. The less of your available balance you use, the better. According to Equifax, one of the major credit bureaus, keeping your credit utilization under 30% will boost your credit.

Myth #2: To improve your credit, close a card

If you've struggled with poor to fair credit, you may be looking for quick ways to improve your score. Although closing a credit card may seem like a good idea to prevent accruing debt, closing a card can actually damage your credit.

When you close a card, you lose access to that credit line, so your credit utilization may increase. And, if the card you close is one of your oldest accounts, you'll also shorten the length of your credit history, another factor impacting your score.

There are some good reasons to close a card — for example, a card may have a high annual fee, or you feel tempted to overspend with another credit card — but be aware that closing your card may cause your credit score to decrease.

Myth #3: If you have poor credit, you can't qualify for a credit card

If you have less-than-perfect credit, you may feel like qualifying for a credit card is impossible. Some of the most popular rewards cards — such as the Capital One Quicksilver or the Chase Sapphire Preferred card — do require good to excellent credit, so you may not qualify for those options.

However, that doesn't mean you can’t qualify for any card. Several options are designed specifically for those with limited or poor credit. You can also apply for a secured card, which requires a security deposit, to start rebuilding your credit or establishing a positive credit history.

By using your card, paying your bill on time, and keeping your card balance relatively low, you can improve your credit over time. Later, you can qualify for other cards, including those with robust rewards programs or lower rates and fees.

Myth #4: Credit card rates are fixed

When shopping for a credit card, it's important to pay attention to a card's fees and annual percentage rate (APR). However, even if a credit card has a competitive rate when you first apply, it can change over time. Unlike other products, such as car loans or personal loans, credit card rates aren't fixed.

Credit card APRs are usually tied to a variable rate index, and issuers can change the APR on their credit cards as the variable rate index changes. For example, the average APR for credit cards that assessed interest was 16.28% in 2020, but the average rate was 22.63% in 2024 — an increase of nearly 40% over five years.

Myth #5: You only need to make the minimum payment

Your payment history — or whether you make your required payments on time — is, indeed, the biggest factor affecting your credit score. Paying at least the minimum amount required is critical for building your credit.

However, paying only the minimum can be an expensive mistake. According to Experian, the average credit card balance per person was about $6,500.

If you had that balance at 22% APR and a minimum payment of $195, it would take you 52 months to pay off your debt, and you'd pay a total of $10,137.47 — interest charges would add about $3,600 to your overall cost.

Myth #6: Credit card terms are non-negotiable

Credit cards can seem inflexible. However, if you've been a good customer, your credit card company may work with you to adjust your terms or fees.

If you have good credit and have never missed a payment, you might be able to negotiate a lower APR on your card. Call your issuer's customer service department and explain you're considering switching to another card to take advantage of a lower rate; the issuer may be willing to lower the APR to prevent losing you as a customer. A 2023 survey from Lending Tree found that credit card issuers granted 76% of customer APR reduction requests.

Managing your credit card

Credit cards are popular and convenient tools for managing your expenses and making payments. However, they can be confusing, with complex terms and conditions. Taking the time to read your card's pricing disclosures and statements can help you understand the ins and outs of your card and how much interest may accrue.

Looking for a new card? Check out our picks for the best credit cards.

This article was edited by Alicia Hahn

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