Debunking Common Myths About Credit Card Debt That May Be Hurting Your Finances

October 14, 2025 - 02:28

These widespread misconceptions about credit card debt could be costing you hundreds or even thousands of dollars. Many consumers fall prey to myths that can lead to poor financial decisions and increased debt. One prevalent myth is that carrying a balance on your credit card is beneficial for your credit score. In reality, consistently carrying a balance can lead to high-interest charges and negatively impact your credit utilization ratio.

Another common misconception is that closing a credit card account will improve your credit score. In fact, closing an account can decrease your overall available credit, which may increase your utilization ratio and harm your score. It's essential to keep older accounts open to maintain a healthy credit history.

Lastly, many believe that making only the minimum payment is sufficient. While it may keep your account in good standing, this practice can lead to prolonged debt and significant interest payments. Understanding the truth behind these myths is crucial for managing credit card debt effectively and improving your financial health.