Myths have a way of sticking around. Sure, we know Bigfoot and the Tooth Fairy aren’t real, but do you still believe you can only have one credit card at a time? 

Untruths about money, credit cards and credit scores are especially pervasive. We’re here to help you discern fact from fiction, so that you start making your credit card work for you. 

MYTH #1: Don’t get a credit card. Just use debit.

FACT: We can see how credit cards and debit cards may seem the same. But there are so many good reasons to use a credit card and so many different cards to choose from. Take a little bit of extra time to research the card that fits you and your lifestyle. With a little bit of planning, you can keep tabs on your spending and pay your balance every month or even multiple times throughout the month. 

A little expert advice:

There are a advantages of using a credit card to pay for your everyday purchases:

• You can accumulate rewards on your purchases to redeem for cash, merchandise, travel or other fun activities
• There are additional, built in travel and purchase benefits (like rental car insurance)
• Credit cards are widely accepted, especially for online purchases or traveling abroad
• Credit cards include fraud protection, which means you’re not held responsible if someone steals and uses your card *
• You can set up your credit card with online or mobile banking, making it easy to monitor your spending
   

MYTH #2: Carry a balance on your card. It helps increase your credit score

FACT: The opposite is actually true: keeping a balance on your card’s limit will reduce your credit score. Paying off your credit card each month should always be your goal. 

If you need to carry a balance, always pay at least the minimum and work toward paying the whole balance as soon as possible. 

A little expert advice:

Carrying a low balance doesn’t specifically impact your credit score, but if you’re unable to pay off your balance within a couple of months and the debt becomes too overwhelming, please talk to an ATB expert.

If you stop by one of our branches, we’ll walk you through alternatives to save interest with another loan option, like a line of credit. 

MYTH #3: Stick to one credit card

FACT: It’s OK to have more than one card, our experts say—it’s the balance to limit ratio, payment history and amount owed that can affect your score.

A little expert advice:

While the number of credit cards you have doesn’t specifically impact your credit score, making payments on time definitely will, as well as the number of inquiries (or applications) to obtain additional cards in a short time frame. With fewer cards, you may find it easier to manage and organize payments as well as maximize your rewards.

Make sure you keep track of your spending so that your payments feel manageable. Using a budgeting app, or your online banking, can help you manage your transactions and see exactly what you’re spending your money on.

MYTH #4: Opening a credit card will hurt your credit score

FACT: Opening a credit card will start your credit file and get you set up for actions—like getting a loan or securing a mortgage— that require credit in future. The key is not to apply for every credit card offer you receive. These inquiries stay on your credit file and affect your score.

A little expert advice:

Don’t stress—a single credit card application doesn’t have a major impact on your credit card score. You may notice a small dip at the beginning of the application, but your score will go back up again if you make payments on time.

If you’re new to credit, it’s a good idea to start your file by opening a credit card. If you’ve been struggling to get approval, submitting several applications in a short time isn’t what we recommend and could negatively impact your score. Instead, try starting with a secured credit card to build your credit rating.

MYTH #5: Don’t accept a credit limit increase

FACT: A credit limit increase might be the right move for your specific circumstances. You may be getting ready to make a large purchase, such as a new couch or turning your backyard into an oasis, and credit may help you do that. 

A little expert advice:

Increasing your credit limit alone doesn’t negatively impact your credit score. If you find that your credit limit is too small for your needs, but you’re paying off your balance regularly, it may be worthwhile to ask for an increase. That said, always take the time to consider how an increase will affect your life and your ability to comfortably make your payments regularly to avoid costly interest charges. From time to time, your financial institution may offer a proactive credit limit increase. Your FI will never increase your limit without the permission of the primary cardholder(s). 

If you’ve got more questions about credit cards, we’ve got answers. Give us a call anytime at 1-800-332-8383.