9 Odd Credit Card Myths

Credit card myths can be hard to avoid.

If you’re in debt with your credit card or trying to improve your credit score, credit card myths can be roadblocks that can prevent you from using them wisely. Some can be so outlandish but still plausible enough that you still follow them.

Here are nine odd credit card myths that go beyond the basic myths of how many credit cards you should have or how often you should check your credit scores. We’ve debunked 11 other myths that can hurt your credit score.

Myth #1: ‘Paid in full’ allows balance to be waived

The myth that writing “paid in full” on a check when sending a payment for a debt will result in the remaining balance being waived is wrong, says Harrine Freeman, a financial expert and author of a book on how to get out of debt.

“This never works,” Freeman says. “It is best to pay the account in full and get confirmation in writing but not by writing ‘paid in full’ on your check.”

Myth #2: Stop identity theft with ‘See ID’ on back of card

This is one of those credit card myths that makes a little sense until you think about it more. The myth that you can prevent identity theft by signing the back of your credit cards as “See ID” is also incorrect, Freeman says. It’s an interesting attempt, but it doesn’t work.

“This does not prevent you from being a victim of identity theft,” she says. “Your identity can still be stolen because thieves can still forge your signature or use a fake ID. Some retailers have a policy that requires a signature on the back of credit cards.”

Myth #3: Married couples have the same credit score

Sharing the same last name doesn’t mean you share the same credit score or credit history, Freeman says.

Both persons have a unique social security number and different credit scores and credit history. They may have joint accounts but will still have different credit scores, she says.

Myth #4: The government owns the credit bureaus

Of all of the odd credit card myths out there, this one has a conspiracy bent to it: The government owns the credit bureaus or the credit bureaus work for the government.

Freeman says this myth is untrue, though many federal laws developed by the government regulate how credit bureaus operate.

Myth #5: ‘Pre-approved’ means you’ll get the credit card

A “pre-approved” credit offer doesn’t mean you’re approved for a credit card, Freeman says. It just means that you’ve been selected through a pre-screened mailing list to apply for a credit card. You still have to apply for the credit card.

Myth #6: Never buy groceries with a credit card

Some people think that using a credit card to buy groceries is a bad idea because it means going into debt for necessities, says Scott Bilker, creator of DebtSmart.com. Such short-term debt is OK if you can afford to pay off the credit card bill in full each month, Bilker says.

“Spending is putting you in debt,” he says. “If you can’t afford your groceries, you shouldn’t be buying them with a credit card anyway.”

Myth #7: Don’t pay back debt with savings

If you have an emergency fund or other savings account that is paying much less in interest than the 18% or so you’re paying on credit card debt, it makes sense to get rid of that credit card debt by using your savings, Bilker says. But just don’t get back into debt with your credit cards, he recommends. Continue building an emergency fund.

If you have good credit and an emergency pops up, then use the credit card if you have to, he says.

Myth #8: Never borrow from one card to pay another

Moving debt around credit cards can be a waste of time if you’re not paying off the balances. But paying one credit card with another makes sense if you’re paying off a credit card that charges 16% interest with one that has a 0% interest rate, Bilker says.

A new credit card can often have a zero percent introductory rate for six months to a year, and that’s a good time to take advantage of it and pay off another card, he says.

Myth #9: It’s illegal for a business to charge a minimum fee

You may have seen some businesses, usually small ones, with home-made signs stating that they charge $3 or so for using a credit card, or that a minimum amount such as $10 or so much be charged when using a credit card. You may think these fees or minimum charges are illegal, but that’s just one of the many credit card myths out there.

The charges aren’t illegal, although this hasn’t always been so, says Will Black of Meridian Merchant Services. They were illegal for years, Black says, and most businesses got away with it.

But the Durbin Amendment limiting swipe fees established a lawful minimum. Now businesses can set a minimum as the “per transaction fee,” also called an authorization fee or auth fee. It’s generally used in convenience stores and caps out at $10, but any business can set its own minimum.

Other credit card myths

There are credit card myths that can prevent consumers from managing their credit card debt properly, including ones that can affect credit scores.