These days a significant number of myths about the credit card debt are in circulation among people. This article will cover the most common myths about credit card debt to which people are familiar, as well, but in reality these myths are not true. The only effective way to get out of credit card debt is to understand its complications. You must have enough knowledge what is true or what isn’t about credit card debt.
Without much ado, following are the six commonest myths and facts about credit card debt, here you go:
1: Your credit record will affect the credit score of other people living with you.
Usually people think that if they miss any credit card payment then it will affect the credit report of the people living with them. That’s not always true because your credit report will only be affected by your own actions and anything you do against your debt agreement will affect your credit report. However, if you have a joint account or property or any other financial connections with other people living with you then it may harm your credit report.
2: You will be imprisoned if you don’t pay the money that you owe to a credit card company.
This is another myth about credit card debt that is totally untrue. That’s because the owed money to a credit card company is a civil debt that will not lead you to jail in any case even if you don’t pay it off. The worst that could happen to you if you don’t pay back the owe amount will be charge that will be imposed on you. As a result, you will be deprived of the possession of some of your assets.
3: your family will pay the entire amount of debt in case if you die.
This myth is also not true in normal conditions. This rule contains certain exceptions. For instance, if any of your family members guaranteed your debt then you they would automatically become liable for your debt and they will have to pay that debt. Other exception is for joint debt.
4: Pay off the minimum monthly payments for your credit card debt is fine.
It is another untrue myth about credit card debt. Paying off minimum monthly payments means you are paying off only the interest on the amount that you have taken out. By doing so, your credit report will also be affected. Your credit rating is calculated on the basis of the total amount of debt that you owe and your total current income. In other words, owning higher amount of debt than your income will affect your credit rating negatively.
5: Creation of credit card debt and paying it off will raise your credit score.
This is wrong. The only way to raise your credit score is to pay off your due payments on time along with certain other factors. So try not to get carried away by such things and don’t put on further debts on you. First try to pay the already owed amount persistently.
6: You can save money by creating credit card debt and using your credit card.
Since the credit card debt is considered as the unsecured loan so this myth is also wrong. Due to the credit card loan being unsecured, interest rates are high on it that nullifies the number six myth on this list. You should also bear in mind that the lucrative offers that are offered on credit cards are just to lure the customers.
by Gemma Maddock