Most products on this page are from partners who may compensate us. This may influence which products we write about and where and how they appear on the page. However, opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain.

As a credit expert, I've seen it all when it comes to credit card myths. Below is a breakdown of five of the most common credit card myths I've come across time and again. Considering these myths will give you my insider knowledge on how to both build credit and raise your credit score.

Myth 1: Credit Cards Make You Go Into Debt

Credit cards have a reputation for causing people to go into debt. Yet the idea that opening credit cards is a bad financial choice isn't accurate. You get to decide how you will use your credit cards, just as you get to decide how you'll use the money in your bank account.

Opening a credit card doesn't automatically lead to debt. According to the Federal Reserve's 2020 Survey of Consumer Finances, a little more than half of families in the U.S. don't carry outstanding balances on their credit cards.

If you feel confident you can pay you cards on time and in full every month, your accounts can be an asset instead of a burden. A well-managed credit card may help you establish better credit scores over time and can help you take advantage of some amazing rewards.

Related: The Best Balance Transfer Cards to Help You Tackle Debt

Myth 2: Carrying a Credit Card Balance Will Boost Your Credit Score

The idea that revolving an outstanding balance from one month to the next will somehow help your credit scores is false. This bad advice could lower your credit scores and cost you a lot of money in interest fees.

In reality, credit scoring models like FICO and VantageScore reward you when the balance-to-limit ratio (called credit utilization) on your credit cards remains low. Smaller credit card balances can lead to lower credit utilization and often higher credit scores. Paying your balances off in full each month is the ideal way to manage your accounts.

FICO also consider the number of accounts on your credit report with outstanding balances. Fewer is better. By paying off your credit card balances before your statement closing date, you can make sure a $0 balance is reported to the credit bureaus for the coming month.

Myth 3: Having Too Many Credit Cards Is Bad for Your Credit Score

There's no such thing as the perfect number of credit cards. You can earn good credit scores with one credit card or with 20. The number of cards on your credit report isn't as important as how you manage your accounts. Personally, I have a dozen credit cards and keep my credit score in the 800s.

However, it is possible to open too many new accounts in a short period of time. Both FICO and VantageScore credit scores consider the number of "hard inquiries" on your credit report. Hard inquiries take place when you apply for new credit. If you have too many hard inquiries on your credit report in the last 12 months, your scores might decline slightly.

It's usually fine to apply for new credit when you want to take advantage of a good credit card deal. But it's typically best to space out your credit card applications instead of applying for a ton of new accounts at once.

Related: Is a Perfect Credit Score Possible? Here's What You Should Know

Myth 4: You Should Close Unused Credit Cards

You might think it's wise to close credit cards you don't use anymore. Yet unless there's a valid reason to close an account, like getting rid of joint cards during a divorce or closing an annual fee card that no longer benefits you, it's usually best to leave your credit cards open.

Closing a credit card might backfire and hurt your credit scores. You won't automatically "lose credit" for the age of the account, as some people believe. (That's another credit card myth, though the overall age of your credit history does have an impact.) But closing a credit card might increase the total credit utilization rate on your credit report. Remember, when credit utilization increases, your scores could go down as a result.

Myth 5: Annual Fees Are a Waste of Money

Here's a credit card myth I fell for myself. Once upon a time, I wasn't a fan of annual fee credit cards. I had excellent credit and felt like there was no reason to "settle" for cards with annual fees. Boy, was I wrong.

I've since come to realize that the right credit card can give you far more value than the cost of its annual fee. Take The Platinum Card® from American Express and the Chase Sapphire Reserve®, for instance. Both of these cards have high annual fees.

However, together with my Chase Ink Business Preferred® Credit Card, these cards helped me earn more than 300,000 Amex and Chase Ultimate Reward Points in six short months. When you stack on the additional card benefits I was able to use (e.g., travel credits, airport lounge access and Uber credits), I've received far more value from them than the cost of my annual fees.

Related: These Are the Best Credit Card Bonus Offers Right Now

Bottom Line

If you've worked hard to earn a good credit rating, you deserve to enjoy the fruits of your labor. Opening lucrative rewards credit cards is just one way to make your good credit work to your advantage. Remember to pay your full credit card balance by the due date each month to protect your credit—that way, those cards can benefit you for years to come.

Up Next:


Michelle Lambright Black

Michelle Black is founder of and Michelle is a leading credit card journalist with over a decade and a half of experience in the financial industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, small business, and debt eradication. Michelle is also a certified credit expert witness and personal finance writer.