Credit Card Myths You Should Stop Believing Right Now
Debunking the myths around credit cards that could be costing you money. Get the facts and choose smarter.
Quick Picks
Best overall: Capital One Quicksilver Cash Rewards. Best for cashback: Citi Custom Cash® Card. Best for students: Capital One SavorOne Student Cash Rewards.
Common Myths Debunked
Even savvy shoppers can fall for credit card myths that end up costing them money. Let's bust some of these misconceptions and find out what actually matters when choosing a card.
Myth 1: All Cashback Cards Are Created Equal
The truth is, cashback cards vary widely in how rewarding they are. Take the Capital One Quicksilver Cash Rewards, for example: it offers a flat 1.5% cashback on all purchases. But if you spend heavily in specific categories, you might earn more with a card like the Citi Custom Cash® Card, which adjusts rewards based on spending patterns.
Capital One Quicksilver Cash Rewards
The Capital One Quicksilver Cash Rewards is a smart pick for those who want simplicity with a 1.5% cashback on all purchases. It's best for someone who doesn't want to juggle multiple cards or track spending categories.
Capital One Quicksilver Cash Rewards
Citi Custom Cash® Card
The Citi Custom Cash® Card can maximize your rewards if your spending habits align with its rotating categories. It's ideal for someone who can adapt their spending to match the card's bonus categories.
Citi Custom Cash® Card
Myth 2: Student Cards Are Only for Beginners
Many believe student cards are basic and offer little value. However, the Capital One SavorOne Student Cash Rewards proves otherwise with its impressive rewards on dining and entertainment. It's a solid choice for students who want to earn while they learn.
Capital One SavorOne Student Cash Rewards
The Capital One SavorOne Student Cash Rewards offers a competitive edge with its dining and entertainment rewards, making it worthwhile even for non-students who frequently dine out.
Capital One SavorOne Student Cash Rewards
Myth 3: High Annual Fees Mean Better Rewards
While some premium cards with high annual fees do offer valuable perks, it's not a given that they provide the best value for everyone. For instance, the Blue Cash Preferred® Card from American Express charges an annual fee but justifies it with a high 6% cashback on groceries. However, if you don't spend enough in these categories, that fee might outweigh the benefits.
Blue Cash Preferred® Card from American Express
Perfect for families or individuals who spend heavily on groceries and streaming services, the Blue Cash Preferred® offers 6% cashback but requires careful calculation to ensure the annual fee is offset by rewards.
Blue Cash Preferred® Card from American Express
Myth 4: Intro APR Offers Are Always Worthwhile
Introductory APR offers can be appealing, but they aren't always the best choice. The key is to watch out for high regular APRs once the intro period ends. Consider the Chase Freedom Rise® for its balance of 0% intro APR and manageable regular APR, making it suitable if you can pay off the balance before the intro period ends.
Chase Freedom Rise®
The Chase Freedom Rise® offers a balanced approach with its 0% intro APR period, but beware of the regular APR. It's best for disciplined users who can clear their balances before the intro offer ends.
Chase Freedom Rise®
Myth 5: Secured Cards Don't Build Credit
Contrary to popular belief, secured cards like the Discover it® Secured Credit Card can be excellent tools for building credit. They function like regular credit cards, reporting to the credit bureaus and helping establish a positive credit history if used responsibly.
Discover it® Secured Credit Card
The Discover it® Secured Credit Card is ideal for those new to credit or rebuilding their score. It reports to all three major credit bureaus and offers cashback rewards, making it a strong contender for credit building.
Discover it® Secured Credit Card
Understanding these myths can help you make smarter credit card choices. Whether you're looking for a student card or trying to maximize rewards, knowing the truth behind these common misconceptions is key. Speaking of rewards, we explored the value of loyalty in M&S Rewards Plus: Worth It for Loyal Shoppers? — a must-read if you're keen on maximizing every penny.
