6 Credit Card Myths That Are Holding You Back Financially
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Written by
Andrew Lisa
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Edited by
Cory Dudak
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Reviewed by
Jasmin Baron
Knowledge is one of the keys to sound financial health, but only when it’s based on facts. Misinformation is as dangerous as a lack of information, and fiscal folklore can hold people back from making smart money moves — especially when it comes to their all-important credit profile.
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The following credit card falsehoods are common, persistent and harmful. However, they have no power over those who know the truth instead of believing what they hear.
This article separates fact from fiction regarding those powerful pieces of plastic in your wallet. Don’t believe these six credit card myths.
Closing Old or Rarely Used Cards Can Boost Your Credit
There’s a common misconception that closing old or unused cards is part of healthy housekeeping. However, the truth is that maintaining those outdated accounts provides two key benefits that can improve your credit and keep your score in tip-top shape.
FICO, the most commonly used scoring model, assigns 30% of your score — more than any other factor except payment history — to amounts owed and 15% to the length of your credit history. That’s 45% — nearly half your score.
Here’s why you should disregard the myth and make small, recurring charges on those old cards to keep them open.
- Lenders like to see a long record of responsible credit use. By closing old accounts, your credit history appears shorter than it really is.
- Active accounts with low balances provide open credit, which improves your credit utilization ratio and, therefore, your creditworthiness.
Your Score Drops if You Pay After Your Due Date
Payment history accounts for 35% of your FICO score, more than any other factor. A single missed payment can tank your score by 100 points or more, and the blemish can remain on your report for up to seven years.
However, familiar credit card mythology confuses “late” with “delinquent.” Lenders typically don’t report missed payments to the credit bureaus until the borrower is 30 days late, at which point the account becomes delinquent and a negative mark is recorded on the user’s credit report.
However, while missing a payment by a few days — or even a few weeks — might incur a late fee from your card issuer, it won’t harm your score.
Checking Your Credit Impacts Your Score
Scanning your credit report regularly is an essential part of healthy financial hygiene, but some people tune out because they believe the myth that it’s harmful to check your credit.
It’s not.
Checking your credit creates a “soft pull” that — unlike hard pulls incurred when officially applying as a borrower — does not register on your report or influence your score either way.
Credit Scores Are Tied to Income
If you’re waiting to start borrowing or applying for credit because you don’t think you make enough money to earn a good score, you might have fallen for a nagging fallacy that says credit is connected to income.
According to Chase, lenders factor salary into their decisions, but your wages have no impact on your credit score.
You Must Carry a Balance To Build Credit
This myth is especially harmful because it can bruise your credit and cost you money simultaneously. One of the cardinal rules of responsible credit use is that you should never carry a revolving balance.
Those who pay their entire statement balance on time each month do not incur finance charges. Those who don’t will pay hefty interest on the remaining balance that compounds daily, the Federal Reserve reports an average annual percentage rate (APR) of 21.91% as of February 2025. Additionally, every dollar you carry on a revolving balance is one that you take away from your open credit, increasing your utilization ratio and worrying lenders.
However, charging purchases and paying in full every month can improve your credit while earning you valuable rewards.
All Debt Is Bad
This deeply rooted myth is detrimental because it fails to differentiate between toxic debt and benign borrowing.
While irresponsible credit card use and borrowing beyond one’s means can quickly cause financial trouble, strategic debt can be beneficial.
Since you don’t pay interest if you don’t carry a balance, charging purchases that you have the cash to cover doesn’t cost you extra and establishes a record of trustworthy borrowing and making on-time payments. Additionally, rewards credit cards offer miles, points, cash back and other valuable perks that cash or a debit card do not.
