Skip to content

3 credit card myths from my childhood I had to unlearn as an adult

March 06, 2021
6 min read
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Editor's Note

This post has been updated with new information. This page also includes information about the Discover it Cash Back that is not currently available on The Points Guy and may be out of date.

Credit cards, when used responsibly, are an excellent financial tool. They help you build credit, show creditors that you are trustworthy for future borrowing (like car loans, mortgages and more) and they can help you afford to travel when your budget may otherwise not allow it.

The only reason I’ve been able to travel as much as I have in the first few years of my professional career is because of credit cards, and the points and miles they earn.

Want to learn more about credit cards from TPG? Sign up for our daily newsletter

But while I’m a strong advocate for using credit cards to afford travel and upgrade your experiences, I haven’t always been card savvy. In fact, up until my mid-college years, I had a very different view of credit cards and the credit card industry as a whole.

I was raised by a conservative, middle-class family in a small town in Arkansas. Credit cards weren’t seen as a financial tool. They were seen as a “necessary evil.” Once I hit adulthood, I was introduced to new perspectives that changed my view entirely. I realized that a lot of my preconceived notions about credit cards were more myth than fact.

Related: How I used Chase Ultimate Rewards to book my trip to Croatia

Myth #1: Credit cards are inherently evil

I was raised on the Dave Ramsey-inspired belief that credit cards are inherently evil.

While it’s certainly possible for credit card debt to spiral when used incorrectly, nothing about credit cards in and of themselves is inherently malicious. In fact, a lot of people have successfully used credit cards to help them in their journey to financial stability.

Sign up for our daily newsletter

There is a lot of mistrust around credit card issuers and their intentions. And to be fair, the credit card industry hasn’t always practiced the most honest policies when it comes to protecting cardholders. But a lot has changed in the industry since the mid-1900s when credit cards first took off in American society, both in how issuers make money and in the legal protections offered to consumers.

Related: Complete history of credit cards

The key is to be mindful of how you are using your credit card. Budget your spending on a credit card just like you would on your debit card and pay off your bills each month. Credit cards themselves aren’t a bad thing — you just have to make sure you're using them to your advantage and not as a license to overspend and rack up interest.

Myth #2: Credit cards are a substitute for an emergency fund

Growing up, the only time my parents used credit cards was when they didn’t have the money on hand for a certain purchase.

And in the TV shows and movies I watched growing up, credit cards given to teens always preached the same message: “This card is only for emergencies.” It took me years (and about $1,500 in credit card debt racked up on my first credit card in college) to unlearn this myth.

While a card is a line of credit that can provide temporary capital if you don’t have another option, it’s not the same as having a solid savings account built up for emergencies. Now, I recognize that not everyone is privileged enough to be in a financial situation where you can have three months of essential bills stashed away in the bank in case of a rainy day. But if you are in a position where you can start putting a little away each month, that’s a better option for your emergency fund than relying on a credit card.

Related: 6 simple rules to stay out of credit card debt

Throughout college, I avoided putting money away in savings (even though I could have) because I knew I had my Discover it Cash Back in my wallet for emergencies. That circled around to bite me later, and it took more than a year for my finances to fully recover.

Myth #3: Only experts can utilize rewards programs

I’ll be very honest, I didn’t even realize what credit card rewards really were until I took a personal finance class in college that taught a section on the different types of cards and their advantages and disadvantages. My parents didn’t use credit cards that earned rewards, and until college, I had no other avenue to learn about them.

It can definitely seem daunting to dig into credit card rewards programs. What is a Membership Rewards point? What can you use your points for, and are they even worth worrying with?

While there are certainly expert techniques for earning and burning points (which TPG experts have gone through during our TPG Talks webinars), there are plenty of ways for beginners to easily tip-toe into credit card rewards. My first travel points redemption was through using points at a fixed rate via the Chase travel portal, and it worked pretty much just like using Expedia.

(Photo by Madison Blancaflor/The Points Guy)
My first points-funded trip was to Croatia, and I used my Chase Sapphire Preferred Card and Chase's travel portal to book the trip. (Photo by Madison Blancaflor/The Points Guy)

Bottom line

There are a lot of misconceptions about credit cards. Part of that is because of the lack of in-depth financial education taught in most public school systems, part of that falls on guardians to each their kids along the way and part of it is due to the way credit cards are often portrayed in the media.

If you’re a beginner just starting to research building credit and using rewards credit cards, don’t let all the myths floating around about credit cards stop you from taking the leap to apply for your first card. So long as you’re building responsible habits, credit cards have the potential to be a great financial tool to help you reach your goals even faster than paying cash.

New to TPG? Read our beginner's guide or watch our TPG Talks: Beginner's Guide.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Top offers from our partners

How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
See all best card offers

TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023