An integral part of adulting is being able to open an online savings account in a bank on your own. That means that you need to stop depending on payroll accounts provided by your companies. What? Do not deny that you weren’t extremely thankful and excited when you got your ATM cards from your first job. Seeing your name embossed on the glorious plastic card for the first time would indeed put a smile on your face, and you got it without the inconvenience of banking applications and long queues. How sweet.
However, as time goes by, you will find yourself at the disposal of these payroll accounts. You would be hoping your old employer would not close the bank account you are using to receive payments from your gigs and projects. Unfortunately, you need to step up and finally gather the requirements for a new savings account. The convenience of payroll accounts is all cool, but the feeling of having your own is incomparable. You would see your hard-earned money grow, and normally, you would think of the next best thing.
Just imagine, from payroll and cash cards to platinum credit cards. How superb. You could get extra financial assistance for anything that you need, and in doing so, you would get a good credit score. However, if you are thinking of a credit card as something else but a helpful financial tool, you must have heard of old perceptions about them. (Probably from your parents.) Anyways, if you are still hesitant or you are seeking clarifications, this article is for you.
Debunking these credit card myths
1. Credit cards are for leisure
For most people, credit cards mean an improved lifestyle, which is why this myth exists in the first place. However, the truth is that banks and financial institutions tailor credit cards to the individual’s capacity to pay. That means their existing savings is a big factor before they get a credit card; the person’s current job and income also play a role in what kind of credit card a person would receive.
See, there are different types of credit cards for different social classes. So automatically thinking that credit cards are for leisure is a myth. Some credit limits serve as emergency funds, and some could barely be enough for a Greece getaway. Lastly, it is up to the person as to how they would be using the card. It is about responsibility and self-control. If people around you perceive things this way, that says more than their character and financial responsibility.
2. Credit cards can make you penniless
Credit cards would bankrupt you, or as your old school parents would like to tell you, credit cards are a bad idea. To debunk this myth, we must first understand its root cause. Following the point above, some individuals lack self-control with their cards, and they become trigger-happy in swiping and shopping. Hence, the leisure myth, but what happens next? When these individuals finally receive their statements of account, they tend to regret the YOLO decision quickly, and without enough funds, their debt would inflate until it drains the reservoir.
It is why older people are continuously warning their offspring about credit cards. It is because of the things they might have witnessed. See, it cannot be from the things they have experienced, because if it is the case, they would tell you encouraging lessons instead of negative warnings.
3. Credit cards are inferior to debit cards.
Have you ever met someone who told you, “Why would you spend the money you don’t have?” Well, these are the people who believe in debit card supremacy and probably those who haven’t had any experience with credit cards. However, invalidating the benefits of credit cards to assert the pros of debit cards is a weak argument. These two have different functions, but they are brothers that work better together.
Why would you spend the money you don’t have? Well, you are not spending; it is called credit cards because you will pay for it anyways.
4. Credit cards make you rich
The last myth in this list is an indirect negation of the previous one because some people think of their credit cards as the money they have. These people might simply be reveling in another adulting milestone. But to think that credit cards make you rich is simply not true, especially for first-time cardholders. Credit cards do not equate to the money you have, but it is a tool that helps you with purchases. It is a neutral tool that banks created to help you out with finances and also do business.
Credit cards have a bad rep, especially to older people. Still, if people only use them wisely and responsibly, they are the next big thing you could get after having sufficient digits in your adult savings account.