Many people believe that closing a credit card account will help improve their credit. Sadly, that's a myth -- as is the idea that paying off your debts will immediately goose your credit score higher.
How many of these very common credit card myths did you think were true?
Knowledge is power, and if you know about credit and credit cards, you can use them as tools. You have an advantage when you know the truth about Canadian credit cards. It's also important to understand how your credit card habits can affect your credit score. Many people don't understand the connection between credit cards and credit score.
You probably thought you knew how credit cards work. Well, now you do.
This post was included in the Carnival of Wealth at Personal Dividends, and the Canadian Finance Carnival at Canadian Finance Blog.
Great job on your infographic Janet.keep up the awesome posts
@debtcoachcanada
Most of these I fully agree with…except 2 and 3. I recently closed 4 of my 5 credit card accounts, keeping my oldest one active, and consolidated all the balances into a new personal loan. My credit score instantly (within one month) went up 70 points (frpm 707 to 767).
I think closing accounts with revolving available credit vs. a personal loan with fixed monthly payments helped increase my score.
Correction, it went up 60 points…fairly significant anyway!
Re: #6 – When I was in Las Vegas earlier, every place wanted to see ID when using a credit card. Either Las Vegas merchants have different agreements with the credit card companies, or we have a whole major U.S. city that ignores those agreements.
I put ‘Picture ID required’ on the back of my credit card(s) because anyone can sign a signature but not everyone will have a picture ID of me. I think the signature is Bogus.