Credit Card Mythology 101

On campus for the first time and you feel like you should apply for a student credit card to celebrate your freedom? That’s a great idea, but before you fill out that first application, let’s examine some of the most popular credit card myths out there. 1. You have to have good credit to get good credit cards. This one actually used to be true, but that’s just not the case anymore. Credit card companies, particularly those that offer student credit cards, have gotten far looser with their requirements in the past ten years than anyone could have every imagined, and even if you have bad credit or no credit, you can still get a great card at a great rate. There are cards designed for every need, and getting a good one can be just a click away. 2. You must have a credit card to shop online. It is unquestionably easier to send your mom flowers, download great music, or order that new jacket online if you have a credit card, but necessary? Hardly. Most sites take online and offline orders, and increasingly, some sites accept transactions from PayPal and similar account services, so shopping online isn’t the only reason you should get a credit card. 3. Rewards credit cards are a great deal. Rewards credit cards like those that offer hotel discounts, air miles, free merchandise and cash back can be a great deal, but they’re not necessarily the perfect card for every credit card user. Rewards credit cards only work in your favor if you do two things. First, you have to make a lot of purchases with your rewards card each month. Second, you have to pay off your balance in full each month. Rewards cards come with higher interest rates than traditional cards to pay for the rewards they’re offering you, so not paying off your balance each month will actually cost you more than the initial reward was worth. 4. I’m responsible for all of the charges to my credit card account if my card is lost or stolen. Believing this myth is like believing that internet rumor about the Neiman Marcus cookie recipe. If you do choose to apply for a student credit card, and someone gets your account number, the law states that you’ll only be liable for fifty dollars in charges, and some credit cards make you pay for nothing if you report the problem right away. Fear of having your account stolen certainly shouldn’t be reason enough to keep you away from the credit card you want. 5. Credit cards just aren’t a safe method of payment. Credit cards are in fact one of the safest methods of payment in the world. Because card companies invest thousands of dollars into fraud prevention each year, new technologies are being created to ensure that each purchase you make, on or offline, is as safe as it can possibly be. If you’re considering a credit card, now is a great time. Understand the deep rooted myths within the credit industry, though, is essential before you make that application.

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