10 myths about how a credit card works.

Credit cards are one of the most widely used means of financing in the country. According to the Financial Citizenship Report published by the CVM (Brazilian Securities and Exchange Commission) and the Central Bank, it is estimated that, at the end of 2018, there were 3,457 credit cards for every 10,000 adults, which was equivalent to more than 27 million credit cards.

Credit cards, thanks to their ease of use, have helped thousands of people to purchase products or services through the credit they can use. Discover some myths about them in this article so that you can rethink your concept.

What is a credit card?

It is a very simple and globally accepted method in millions of points of sale, in which buyers carry a bank card the size of a card that incorporates a Chip with the customer's account information, the name of the holder, the expiration date, a space for signature and a CVV code.

Getting a credit card is very simple:

• It is requested that you apply for a credit card from a bank or financial institution.
• The entity will carry out an analysis that will reflect the debt capacity.
• The rating provided by the credit bureau (SPC) will be assessed using your credit history.

How does a credit card work?

Before learning about the most common myths, you need to know how a credit card works. It's very simple:

• It is a plastic card that provides information about a customer's account in which a maximum credit line is used;
• The money that the bank lends you must be returned and if the date passes or is not covered with the total amount of expenses, the return of the financed money must be associated;
• Credit cards work thanks to revolving credit;
• With a credit card you can use the revolving credit as many times as you want, as long as you do not exceed the maximum limit;
• When you use a credit card and pay on time, you can make the most of your credit line whenever you want;
• Deadlines are usually every 30 days and you are generally given an extra 20 days to pay for expenses that were covered with the card;
• On the other hand, revolving credit lines offer interest-free months, which are nothing more than monthly installments of a purchase without generating interest;
• Furthermore, if you fail to make payments, the card is blocked and you have to make payments with the full amount and the interest they generate.

Myths about using credit cards

Often, when you don’t know how to use a credit card, you may come across a lot of inaccurate or false information about them. But on the other hand, once you know how this type of credit works, you will be able to take advantage of all its benefits and advantages.

1. They are an extension of your salary. This is probably the most common myth about bank credit cards. They are not a salary increase, they are a tool to finance purchases over time.
   
2. It is more convenient to have just 1 credit card. A credit card may be more than necessary, the problem is that this single product does not have all the possible advantages that can be obtained. The benefits of a credit card are different, so having more than one can improve its use.
   
3. They always generate debts and interest. If you pay the amounts of the credit used on the respective payment dates, there will be no interest or fines charged.
   
4. You will be in debt for the rest of your life. You have to pay as you go, and if you only pay the minimum, you can still pay off the debt, even if it takes longer to pay off what is owed.
   
5. They will solve your financial problems. Only investments and savings can solve your financial problems.
   
6. Everyone can have one. Before applying for a credit card, you are subject to an analysis carried out by the financial institution to decide whether you meet the requirements to have it.
   
7. All cards are the same. It is not true, although they all work in a similar way, the advantages of a credit card are different from each other and there are some that are more convenient.
   
8. A credit card is identical to a debit card. It's not quite like that, the origin of the funds makes them very different services, with the first one being payable on credit, but not with a debit card.
   
9. With any card you can buy online. Some do not allow it and it is not recommended to try with others, as they are not safe enough.
   
10. They do not affect your credit history. If you fail to make payments, your credit history will be affected, but this is not exclusive to credit cards, but to any credit product.

Now that you know the most common myths, you can find the credit card that best suits your needs and take advantage of this excellent financing alternative.