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Credit Card Debt Myths & Facts

Published by admin on November 23, 2009

Right now there are many myths that float around the credit card debt. In this article you are going to find out what are the most common credit card debt myths that people are very familiar with, but the truth is that they are not true. Before you will get out of debt it’s very important that you understand exactly what the truth about credit card debt is and what is not true. Only this way you will manage to get out of debt.

So here is the list with the credit card debt myths that we’ve been able to come up with:

Myth #1: In case you are going to miss out a credit card payment, the credit score of the other people living at the same address is going to be affected.

Your credit record is not going to be affected for sharing an apartment with a room mate who is buried deep in debt. Your credit record is only going to be affected by your actions and by what you are doing. There is a possibility to be affected, this is happening only if you have a joint property or a joint bank account, or if you have any other form of financial connection to that person that is sharing the residence with you. But unless this is happening, your credit score will remain the same no matter what happens to the other person.

Myth #2: If you owe money to a credit card company and you do not pay them in time you will have to go to prison.

The money that you owe to the credit card company is considered to be a civil debt, so this means that there is no way you could go to jail. In case you will not pay your credit card debt back the worst thing that could happen to you is to face a charging order, which is going to allow the credit card company to take to sale some of your belongings.
In case you have credit card debt a small or a big amount of it we suggest that you talk to the representatives of some debt consolidation companies, like the one we are promoting on our blog, these are able to help you get out of debt fast and at the lowest possible costs.

You should not worry about credit card debt, since most of the people that have problems with credit card debt will never get to the point where they receive a charging order and even more of them will never have to declare bankruptcy.

Myth #3: In case I will die my family will have to pay all my credit card debt.

On normal circumstances this is not true. There are some exceptions from this rule, for example if you have guaranteed the debt of someone who died, you will automatically be liable for his debt and will have to pay for it. Another exception for this is when you have jointly borrowed some money from a person that died. For example a widow will be fully liable for the debts after he’s wife is dead.

Myth #4: Paying only the minimum monthly bill for your credit card debt is just fine.

The truth is that it is not. Not only you will not be able to pay down your credit card debt, but you will most of the time pay down only the interest rate for the money that you have borrowed. And another negative thing about paying only the minimum on your credit card debt bill is that your credit rating is going to be affected by this. The total amount of debt that you carry around along with the percentage of your current income that the debt you have represents is considered to be a very important factor in calculating your credit rating.

Myth #5: Your credit score will get better if you create credit card debt and after that you pay it.

This is not true. In case you would like to create a good credit score you will have to pay on time the bills for more important/essential things like the home mortgage that you have. Since these are the most important things you must have in mind.

Myth #6: By using your credit card and creating credit card debt you can save money.

This is not true since the credit card debt is considered to be an unsecured loan, so the interest rates are very high. Also the cash back programs plus the other promotions that are available at any credit card out there are only there to lure the customers, in case you will look for facts, you will notice that overall you will have to pay a lot more than you’re taking at any credit card that you have.

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