Don’t believe these credit card myths
Whether you already have credit cards of your own or are considering getting one for the first time it’s worth knowing how they work. Here we clear up a few myths.
1. Lenders are unwilling to help if you’re struggling to pay
If you’re struggling to meet your credit card payments you might think your lender will just charge you a fee for missing it, without offering assistance. However, this isn’t necessarily the case, because in certain circumstances they may be willing to put your repayments on hold for a little while. So always let them know if you feel you’re going to be late, as it could save you from being hit with extra charges and doing harm to your credit rating.
2. You only need to make the minimum monthly repayment
While you won’t be falling foul of any rules if you only make the minimum monthly repayments, you will be leaving yourself open to accrued interest. It might be tempting to only cover a small amount of your balance, but the total you’re expected to pay back can soon mount up. Your lender is unlikely to complain, but in the worst case this might see you paying back more in interest than you initially owed, which can prove problematic. If you can you should aim to pay off the total balance each month to avoid interest, but it’s always wise to compare credit cards to find the best interest rates, in case you aren’t able to do this.
3. You risk going to prison for not paying off your credit card
Under no circumstances will not being able to pay a credit card bill see you end up in prison. The truth behind this myth is you’ll most likely be given a County Court Judgement, which will ask you to make contributions to clear off the debt. While this may harm your future credit card applications, it won’t see you spending time behind bars.
4. You only need to pay half on joint debts
While in real terms you may only be responsible for totting up half of the outstanding balance on a credit card, you may be pursued for the full amount if the other party doesn’t pay. That’s why it’s always important to carefully consider making joint financial agreements, as if the relationship turns sour it can cause problems.