The number of credit card users in India in 2019 touched 52 million. However, despite the widespread popularity and availability of information on credit cards, certain myths still prevail. Read through these myths before applying for a brand-new credit card:
Common myths prevailing about credit card
1. Interest rate is high: It is a common belief that the interest rate offered for a credit card is extremely high. Instead, the credit card’s interest rate depends on several factors such as the credit card limit, amount borrowed and your credit score.
2. The annual fee is negotiable: An annual fee is charged for a credit card, which is fixed for all the customers based on the card you choose.
3. Credit card limit increase may hamper your CIBIL score: From time to time, based on your credit card usage, banks also offer to increase the credit card limit. Increasing the card limit will not adversely affect your credit score.
4. A new credit card hurts credit score: A new credit card increases your CIBIL score on the contrary. The credit score only would fall if you fail to meet the billing cycle every month.
5. Close a credit card if you are not using it: Closing a credit card would reduce your total available credit, and proportionately increase your credit utilisation.
6. Make monthly payment soon: Make the monthly payment before the scheduled date. Any payment made before that will not earn you any extra reward points.
7. Even if I pay credit card dues late, it is ok, as long as I repay in full: For any payment made after the scheduled date, whether half or full, will result in some
Conclusion
These are some myths that will help you make a better decision about credit card application and usage.
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