Credit Card Myths That Are Costing You Money

May 22, 2023

One of the most popular financial tools in use today is the credit card, and when used correctly, they can be quite beneficial. Your Clovis financial advisor says, there are a few credit card misconceptions, though, that may wind up costing you money. The following credit card myths should be dispelled:

1 –  Minimum payments are sufficient: A lot of people think they are in good standing as long as they only make the minimum payment on their credit card. This is untrue, though. You will incur interest if you simply make the minimum payment, which can soon build up and cost you considerably more than the original purchase price.

2 – Closing a credit card will raise your credit score—can instead lower it. Your available credit decreases when you shut a credit card, which may result in a higher credit use rate. High use might affect your credit score because this ratio contributes significantly to credit scoring.

3 – Only carry a balance on cards with 0% interest: Carrying a balance on a card with 0% interest can seem like a smart idea, but it might wind up costing you money. You can be faced with a high interest rate when the 0% interest term expires, and you will be required to pay interest on the whole debt, not just the remaining balance.

4 – Rewards cards are consistently worthwhile: The ability to earn cash back or points with rewards cards is nice, but they sometimes have outrageous annual fees and interest rates. If you lack the self-control to pay off your amount in full each month, the benefits might not be worth the additional fees and interest.

Conclusion

In conclusion, debunking credit card misconceptions is essential to maintaining good financial status. You may save money and raise your credit score by avoiding these widespread myths. Always make more than the minimum payment, keep old credit cards open, settle accounts in full, and carefully analyze reward card annual fees and interest rates.

Are you trying to find a financial advisor in California? Look no further than Soutas Financial & Insurance Solutions Inc. your financial advisor in Clovis Ca is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax- Efficient Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family.

We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.