3 Pieces of Credit Card Advice You Shouldn't Listen To

by Christy Bieber | Published on Oct. 2, 2021

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A man sitting at a table in a casual restaurant and tapping his credit card on the payment reader being held by the waiter.

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Some credit card advice could lead you astray.

Knowing how to use credit cards wisely is a crucial financial skill. While cards can help you build credit and improve your financial life, they can also lead you into a world of trouble.

There are lots of tips out there about the best way to handle the responsibility of a credit card, and most of the information is pretty good -- but there are three common pieces of advice that it may not make sense to follow in every situation.

Here's what they are.

1. Never carry a balance

One rule of thumb we hear all the time is that you should never carry a credit card balance. And while that may seem like good advice, the problem is that "never" is too strong of a word. There are, in fact, times when it could actually make sense to carry a balance on your card.

One good example is if you must make a large purchase that you plan to pay off over time and you are able to qualify for a credit card with a 0% introductory rate on purchases. As long as you can pay off your balance before the 0% rate expires, charging the item could be your best and only option to afford to buy it interest free.

A better rule to follow could be to avoid paying credit card interest at the standard interest rate, as that's when carrying a balance becomes expensive and interferes with your other financial goals.

2. Avoid annual fees

You may also hear that avoiding annual fees makes sense, especially since there are plenty of cards out there that don't charge you a yearly fee. This advice isn't necessarily sound, though, because sometimes cards with annual fees come with rewards and perks that more than justify what you'd pay for them.

For example, let's say you get a travel rewards credit card with a $99 annual fee. It allows you to bring free bags on flights and you save $150 per year in checked bag fees by using it. In that case, you'd be better off getting that card over a no-fee card that doesn't offer this perk.

When deciding if a card with an annual fee is worth it, look at what the card offers and add up the value of the perks you'll take advantage of. If the rewards and benefits more than cover the cost of the card, it's probably a good one to apply for.

3. Choose the card with the lowest interest rate

Finally, you may hear that you should make sure to get the lowest interest rate possible on your credit card since card interest can be so expensive. However, the interest rate won't matter if you plan to never carry a balance.

As long as you're confident you are always going to pay off your card in full before the payment comes due and the interest kicks in, then you should look for a card that offers the best rewards and benefits tailored to your spending habits. In that case, the card's APR shouldn't even be a consideration.

By avoiding these pieces of bad credit card advice, hopefully you can find the perfect card to meet your individual needs.

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