5 Credit Card Myths That You Should Not Believe

In the past, payments were mostly made in cash. With the advent of other payment modes,  it became possible for people to pay for purchases without having to carry a bulging wallet. But the real transformation took place with the introduction of Credit Cards. These plastic cards that can fit in one’s palm have made it possible to buy now and pay later. However, despite being in existence for decades, there are still many misconceptions about this nifty financial product. So, let’s debunk some myths surrounding Credit Cards.

Myth #1: Interest is charged right from the day of purchase

This is a popular belief, held by many. However, it is not true. All Credit Cards, including ICICI Bank Credit Cards, come with an ‘interest-free grace period’ during which interest is not charged on your purchases. The time period between the end of your Credit Card billing cycle and the Credit Card bill payment due date is known as the interest-free grace period. Therefore, if you pay your Credit Card bills on or before the due date, no interest will be charged on your purchases. Interest starts to accrue only after the due date.

However, this applies only to purchases made on your Credit Card and not towards cash withdrawals made using your Credit Card. If you use your Credit Card to withdraw cash, interest starts to accrue immediately and continues till the date of repayment.

Myth #2: Credit Cards can make you spend impulsively

This is another myth doing the rounds ever since Credit Cards came into existence. While Credit Cards do make it extremely easy and convenient to buy goods and services, they don’t make you a spendthrift. Spending impulsively only serves to signify a lack of financial discipline and cannot be attributed solely to Credit Cards. For instance, a financially disciplined individual with responsible spending habits is very unlikely to go on a mindless spending spree. Nevertheless, if you still feel that Credit Cards might make you spend impulsively, you can make use of budgeting apps or tools to inculcate responsible spending habits.

Myth #3: It’s enough (and even ideal) to have just one Credit Card

Credit Card issuers generally tend to collaborate with different brands, service providers and retailers. This allows them to offer their customers exclusive deals, discounts, promotions and specialised offers. A single Credit Card might not be able to offer you comprehensive benefits from multiple brands and service providers.

By holding just one Credit Card, you might actually be missing out on several attractive discounts and offers. With multiple Credit Cards from different issuers, you can increase your chances of enjoying access to a wide range of deals and benefits from various brands and retail outlets.

Myth #4: It is not a good idea to enhance your credit limit

One of the primary reasons for the propagation of this myth is the belief that an enhanced credit limit will only serve to increase the amount of spending by the Card holder. Again, this is not true, as it boils down to the individual’s own level of financial discipline. If you’re reasonable when it comes to Credit Card usage, there’s absolutely no need to fear a credit limit enhancement. In fact, an increased credit limit will only help you in times of dire need and other emergencies by letting you use your Card for large expenses.

Myth #5: You can’t take a loan against your Credit Card

There is a very common myth. However, ICICI Bank offers a Loan Against Credit Card with an easy process.  You can apply for the loan online and get quick approval since minimal documentation is required. The Bank credits the loan amount directly to your bank account. The EMIs are billed to your monthly Credit Card bill. The loan on your Credit Card also helps you in building your credit score- you just need to pay your EMIs on time. For this loan, no security or collateral is required. So, if you ever need bulk funds for emergencies, travel or more, your Credit Card can be a handy solution.

Myth #6: Free Credit Cards are the real deal

While Credit Cards with no annual fees are a great option, they might not always bring benefits such as reward points, frequent flier miles and airport lounge access. These premium benefits are generally offered only by Credit Cards that charge an annual fee. To top it all, Credit Cards that charge an annual fee usually tend to waive it off once you exceed a certain specified spending threshold for the year. This effectively makes them free. With so many benefits on offer, it makes little sense to stick only to free Credit Cards.

Conclusion

What we understand from this blog post is that when used prudently, Credit Cards can help you achieve financial freedom. Like any other financial product, they need to be used with proper planning. That way, you can optimally tap into the benefits they offer. Check out ICICI Bank Credit Cards’ eligibility criteria and apply for one now.

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