Credit Card Myths vs. Reality: These 6 misconceptions prevent people from using credit cards..

There was a time when every purchase required cash. Then came debit cards and online payments, and the real change came with credit cards. These small plastic cards made Buy Now, Pay Later easier. But despite being in use for years, many misconceptions persist. Based on information provided on ICICI Bank's website, we'll dispel these misconceptions. Here, learn the truth about 6 major credit card myths.

Myth 1 - Interest begins immediately upon purchase

Fact: This is the biggest myth. The reality is that every credit card has an interest-free grace period. If you pay in full before the bill due date, no interest is charged on any purchase. Interest begins to accrue only when you pay after the due date. Yes, if you withdraw cash from your credit card, interest begins to accrue from that day and continues until the full amount is paid.

Myth 2 - Credit cards lead to wasteful spending
Fact: Credit cards don't lead to spending; they foster a habit of spending. If you maintain financial discipline, credit cards are merely a convenient tool. Nowadays, budgeting apps and alerts make it easy to control your spending.

Myth 3 - One credit card is enough
Fact: Every credit card offers offers across different brands and categories. Having just one card can lead to missing out on many discounts, cashbacks, and rewards. Choosing two or three cards wisely can be a profitable deal.

Myth 4 - Increasing your credit limit is wrong
Fact: Increasing your credit limit doesn't necessarily mean increased spending. In fact, a higher limit improves your credit utilization ratio, which improves your CIBIL score. This can be very helpful for large sums of money in an emergency.

Myth 5 - You can't get a loan against a credit card.
Fact: This is a very common myth. However, the reality is that ICICI Bank offers a loan against a credit card, and the process is quite simple. You can apply for this loan online, and with minimal documentation, approval is quick. The bank credits the loan amount directly to your bank account. The EMI for this loan is added to your credit card bill every month. This loan taken against a credit card also helps build your credit score, provided you pay your EMIs on time. This loan doesn't require any security or collateral. Therefore, if you ever need a lump sum of money for an emergency, travel, or a major expense, your credit card can prove to be a useful and convenient option.

Myth 6 - A free credit card is the best option.
Fact: Free cards often don't offer reward points, lounge access, or travel benefits. These premium features are typically available only on credit cards that charge an annual fee. Furthermore, credit cards that do have annual fees often have this fee waived upon reaching a certain annual spending limit. This makes these cards practically free. With so many benefits, limiting yourself to just free credit cards doesn't seem wise.

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