Credit card use is already rooted in our financial lives, at least for most of the Brazilian population. And you may have heard many tips and opinions about this little “piece of plastic” that “turns” into money. But what is actually true and what is only myth?
1. Credit Card is the villain of the Home Budget.
MYTH, but it’s up to you. Many people even avoid owning any credit cards for this reason. In fact the card may even be this villain, but only if you don’t use it well. Behaviors such as spending more than you can and using the card to fund your purchases are sure to make the card a big villain.
But if properly used, this same card can give you many advantages: earning miles or points in loyalty programs and improving cash flow are some of them. Not to mention the convenience of this means of payment.
2. Credit Card is unsecured.
MYTH, but it’s up to you. If you have a ‘high risk’ behavior regarding card usage (you make a lot of internet purchases on untrusted sites or tell your card number in any form) then you can make the card very insecure.
So pay attention to these activities and always look for more safety tips. Lock your card immediately in case of loss, theft or suspected irregular purchases. Financial institutions already do a good job of preventing these scams, but you have to do your part as well.
3. Credit Card interest is high.
TRUTH. Yes, this is one of the major disadvantages of the card. It is very easy to split your card account, but the price you pay is the high interest rates charged.
If someone tells you otherwise, be suspicious: financial institutions usually even make a good income from this type of interest, so there is not necessarily an effort on their part to stop you from getting into debt (you just can’t default but the account comes out expensive for these institutions too).
4. Credit Card is all the same.
MYTH. They may be similar, but you can still pan good options in the market.
As there is some competition in this large market, you should always check the conditions (monthly fees / annuities, for example) and benefits (discounts on certain purchases, loyalty program, travel insurance etc.) before choosing your card.