Having a good credit score is very important in your financial picture, and thus taking care of your credit card debt can boost your score. However, there are several misconceptions surrounding credit card usage. Misconceptions can be annoying as well as costly when it comes to credit cards. Here are some credit card misconceptions you should know:

Getting a new credit card negatively impacts your score

When applying for a new credit card, there is a “pull” of your credit history, which can impact your score. Too many pulls in a short span mean that you are in financial distress, and this can impact your score negatively. However, once in a while, “pull” does not, and getting a new credit card will reduce your credit utilization ratio, provided you don’t incur more debt. The lower ratio will boost your credit score.

You will pay higher rates to get credit card rewards

Mostly credit cards can offer premium rewards and benefits, and the misconception is that they come with high annual fees. This is, however, not true as great rewards credit cards don’t have higher rates. Several credit cards are offering lower APRs and great rewards. The rate one gets on their credit profile.

Federal Reserve sets credit card rates

The Federal Reserve can sometimes lower the Federal Funds Rate meaning banks can borrow at lower rates helping them offer low rates to consumers lending like loans and credit cards. However, the Fed does not directly set rates for credit cards, and credit card providers are not obligated to lower rates whenever the Federal Funds Rate drop.

Having more than one credit card complicates your finances

With more than one credit card, you can take advantage of the attractive deals that service providers, brands, and retailers offer. For instance, you may get a travel agency giving an offer on one card and a retailer offering one on another. Therefore having more than one credit card will enhance your chances of taking advantage of such deals from different merchants and service providers.