Credit Card Myths

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By Ketwan Williamson
eHow Contributing Writer

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A number of credit card myths keep consumers from trying to obtain a credit card or from understanding the terms of their credit cards. Some of these myths deal with interest rates, fees and the type of credit record required to get a credit card.

Myth: You Can Get a Credit Card Only With Good Credit

You don't have to have perfect credit to get a credit card. You can have bad credit and still obtain a credit card; however, you will probably have to pay higher interest rates and account fees to maintain your credit card. You will also probably start out with a low credit limit, somewhere in the range of $100 to $500. Credit card companies usually charge higher rates and fees to people with bad credit as a way to compensate for taking a risk on them.

Myth: With No Credit History, You Cannot Get a Credit Card

If you don't have a credit history, it may be a little difficult to get a credit card, but you can still get one. You should have no trouble obtaining a secured credit card, where you make an initial deposit and then have an available balance to use up to the amount of your deposit. You would then use your secured MasterCard or Visa card anywhere credit cards are accepted, make payments and build up your credit history to later obtain an unsecured credit card.

Myth: Credit Card Interest Rates Stay the Same

Your credit card interest rate can change from year to year. Your credit card company can increase your interest rate whenever it chooses, as long as it gives you at least a 15-day notice, according to the U.S. Department of Treasury. You may be able to decrease your interest rate by calling your credit card company to negotiate a smaller rate.

Myth: Credit Card Fees Are Non-Negotiable

You can negotiate having annual fees removed, having over-the-limit fees taken off your account, and having other credit card fees removed as well. Contact your credit card company to negotiate fee removal and provide an explanation as to why you want the fee removed. For example, you might ask to have a fee removed if you mailed your payment in well before the due date but for some reason the payment wasn't applied to your account on time, or if you incurred a fee because a vendor overcharged you and put your balance over your limit.

Myth: Simply Making On-Time Payments Will Increase Your Credit Score

You have to do more than pay your credit card on time to raise your credit score.Yes, paying your credit card on time will help lift up your credit score, but if your balance is relatively high compared with your credit limit, then your score could be negatively impacted. You should make sure that you keep your credit card balances low or pay them off as soon as possible to keep your credit score intact or even raise it.