Four common credit card myths debunked

Wondering how to manage your credit card for long-term financial health? We've got you covered. With so many myths circulating about credit cards and their impact on your credit, we've put together this list to help you separate fact from fiction. 

1. Myth: You only need to make the minimum payment - While making the minimum payment can keep your account in good standing, it often comes at a high cost in interest over time. Paying your balance in full each month is the best way to avoid unnecessary interest, pay off debt faster and maintain a healthy credit score. 
2. Myth: Carrying a balance boosts your score - Carrying a balance from month to month does not increase your score, in can lower it. Keeping a balance raises your credit utilization ratio, which makes up 30% of your FICO score from Experian¹. Since credit utilization is highly influential, it's best to keep it low, ideally under 30%.
3. Myth: All debt is bad - Using a credit card responsibly for purchases you can afford to pay off helps build your credit and shows lenders that you're a dependable borrower. Well-managed debt creates a positive credit history, which can increase your borrowing power and help you qualify for lower interest rates. 
4. Myth: Closing old cards helps your score -  Closing an old or unused card can actually hurt your credit score by reducing your total available credit and shortening your credit history. Unless you need to close an account, keeping older cards open with zero balance can work in your favor. 

You can check your latest credit score and see what's impacting it anytime with our Savvy Money tool through Online & Mobile Banking*. This free Member perk gives you access to your full credit report, score and financial tips and education. 

Looking to establish or strengthen your credit? Our Abound Classic Visa could be a great fit. With low rates and no annual or balance transfer fees, you can build credit and stay on track with your financial goals. Apply online or visit your local branch to get started today!