Common Misconceptions about Credit

credit-card-509326_640It’s no secret that a credit card is a great financial tool that if used wisely can help you learn better spending habits and financial responsibility. However, there is a sense of mystery surrounded by credit. Knowing the facts about credit cards can help you avoid significant pitfalls towards your financial health.

  • Did you know that regularly applying for new credit cards can actually hurt your credit score? Only apply for a new line of credit when you actually need a new line of credit.
  • If you don’t make at least the minimum payment on the card, the payment will count as missed. Some people believe that if you pay at least something, you won’t be affected by a negative credit score.
  • If you manage your credit cards wisely, a high credit limit is a very positive thing. Some people believe a high credit limit can lead to financial crisis quite quickly, but as long as you’re responsible and have a repayment strategy in mind, a high limit can actually be advantageous.
  • People think that having more than one credit card can lead to a higher credit score. You don’t need to stick to having just one card, but opening credit cards too frequently can actually negatively impact your credit score.

These basic facts should help you gain more knowledge of credit cards, as well as clear any misconceptions. Whether you need guidance or more tools on managing your credit and maintaining a strong credit history, visit Michael J. Yuda CPA, LLC today.  Michael J. Yuda is the premier CPA in Hawaii and can help keep you financially healthy.