So, when we talk about Debit cards, there's a lot of stuff people misunderstand or just misunderstand. One of the most common questions I frequently face is 'which of the following is not true of credit cards?' In this piece, I'm going to talk about five major misconceptions about Debit cards, stuff I've learned from my personal experience and what I've read research.

First up, 'Credit cards are free money. '

Next up, 'Credit cards improve your credit score. '

Now, 'Credit cards are only for big purchases. '

Next, 'Closing a credit card will improve your credit score. '

Last but not least, 'Credit cards are risk-free. '

First up, 'Credit cards are free money. '

A mistaken belief is that credit cards are not free funds. Sure, you can use your card to buy stuff, but remember, you're only lending that money from the issuer.

If you don't pay it all back every month, you'll incur interest charges, and that accumulate rapidly, resulting in debt. According to the Federal Reserve the average rate of interest on a recent credit card is 16. 3%, so it's extremely important to use your credit card wisely.

Next up, 'Credit cards improve your credit score. '

Another misconception is that using a credit card is good for your credit rating. Using your card responsibly can help your score, but simply owning a card won't increase it on its own.

Your credit rating is influenced by stuff like your payment behavior, your debt level, your credit duration, and the types of credit you utilize. As reported by Experian a favorable rating is usually over 700, and managing your card right can assist you in achieving it.

Now, 'Credit cards are only for big purchases. '

A lot of people believe plastic cards are just for big buys. But, really, cards can be useful for regular purchases, like food shopping or dining out.

Whether you're in a retail establishment, dining out, or making payments, using a card can provide you with rewards or cash rewards. The National Credit Counseling Foundation says 62% of us utilize our cards for regular expenses.

Next, 'Closing a credit card will improve your credit score. '

Some people believe closing a card will make their score better. But that's incorrect.

Closing a card can actually mess up your score, especially if it's one of the oldest accounts you have. Your score is based on the duration of your credit history, and closing a card can reduce your credit history. Fair Isaac Corporation says the standard credit score is 704, and maintaining a lengthy credit history can help you get a better score.

Last but not least, 'Credit cards are risk-free. '

Lastly, Many individuals think Plastic money accounts are No risk. That's incorrect.

If you misuse Your Plastic money, It might cause significant stress. Excessive interest charges, Penalties for late payment, and Spending too much money May lead to debt and Further financial problems. CFPB says We have a Debt from Plastic moneys of $930 billion, so It is crucial to use Your Plastic money responsibly.