4 Myths About Credit Card Debt You Need To Stop Believing
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Written by
Dia Adams
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Edited by
Amen Oyiboke-Osifo
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Reviewed by
Jasmin Baron
Credit card debt myths are stubborn. Some half-truths sound so reasonable and are repeated so often that you barely question them, but that’s how people wind up wasting money, tanking their credit scores or getting stuck with balances that never budge. Let’s set the record straight with a dose of honesty (and a little tough love) so these misconceptions don’t cost you another dime.
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Myth 1: Paying the Minimum Is Good Enough (and Keeps Your Credit Safe)
There’s a dangerous comfort in sticking to the minimum payment. It keeps your account current, you dodge late fees, and it even protects your payment history, which is a major slice of your score. But here’s the reality: Minimum payments are the snail’s pace of debt payoff. Most of what you pay is gobbled up by interest, not the actual principal. Years might pass while your debt barely shrinks, especially as credit card interest rates continue rising to near all-time highs.
Take a $6,000 balance at a 22% annual percentage rate (APR). If you only pay the 3% minimum each month, you’ll still be paying that same debt over 20 years later, and you’ll spend over $8,000 in interest before it’s finally paid off. That’s because your monthly minimum payment may keep you “safe” on paper, but it’s a trap for your wallet and your longer-term credit health.
Myth 2: Closing Old Cards Will Boost Your Score
Tidying up your wallet by closing old, unused cards feels responsible, but rarely helps your score, and usually does the opposite. Older cards push up your average account age, which lenders like. Old cards also pad your total available credit, which helps keep your utilization ratio low — that’s another big credit score factor.
If you shut down an aging account, your average account age drops, your utilization shoots up because you’re using a bigger share of your available credit, and your score takes a hit. The only times closing makes sense? If your card’s annual fee is no longer worth it to you, although in that case, you may be able to convert it into a lower-fee card. Otherwise, let those ancient, fee-free cards pull their weight out of sight.
Myth 3: Carrying a Balance Helps Your Credit Score
This myth refuses to die. You may have heard, “You should leave a balance on your card so the bank knows you’re using it.” Hard nope. No major scoring model rewards you for owing interest. Your score benefits from seeing activity, not lingering debt. Sticking banks with interest payments each month is just tossing money away for no reason at all.
What matters here is credit utilization — how much you owe compared to your total limit. The sweet spot for your score? Use your card, let a small statement balance post (think 1 to10% of your credit limit), then pay in full and on time. This shows lenders you’re active and responsible, without handing them free interest every month.
If you need to pull out your card for a large purchase, don’t panic. Most credit models update monthly, so if you pay it off, your utilization won’t take a long-term hit. As long as you have a plan to pay off your balance before interest charges hit, especially if you’re using a 0% APR credit card, your credit score will survive.
Myth 4: Having Too Many Cards Hurts Your Credit
Plenty of people glance at a bulging wallet and assume it spells trouble for their credit. The truth: Having multiple cards isn’t a problem if you manage them right. More cards mean more available credit, which can lower your utilization ratio — a plus for your score. The pitfall comes from going wild with new applications at once, which racks up hard inquiries and might make lenders side-eye your motives.
As long as you’re paying on time and keeping balances low, several credit cards can make you look experienced and responsible to the credit scoring algorithms. The problem arises if temptation gets the better of you and you start carrying high balances or applying for every store card offer that crosses your path. Stores give you a coupon for opening a new card at the register for a reason — companies know you’re likely to pay them more in interest than any discount you get up front.
Bottom Line
Credit cards are neither friend nor foe — they’re just tools. And like a hammer, credit cards can both build and destroy, depending on how you use them. The damage comes from buying into the old myths that encourage minimal payments, unnecessary closures, needless interest or fear of open accounts. The better path is simple: pay more than the minimum, keep your oldest and highest-limit cards around (unless there’s a glaring reason not to), use your credit wisely without dragging debt from month to month, and open new accounts thoughtfully.
Taking control of your credit means recognizing myths for what they are: money traps disguised as advice. Don’t let misconceptions stall your financial progress or keep you chained to debt. Be smart, stay informed and treat your credit cards like the precision tools they are — there to help, not hurt.
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