Myth: “Carrying a small balance on your credit card helps your score.” I tested it. It doesn’t
The Most Persistent and Costly Myth in Personal Finance
A friend swore that carrying a small balance of around $50 on his credit card each month made his score go up. I decided to test this myth. For six months, I paid my statement balance in full, every time. My score was 780. For the next six months, I let a $50 balance roll over, paying the interest charge. My score didn’t move. It stayed at 780. The only difference? I had paid the bank about $30 in interest for absolutely no reason. Paying interest does not help your credit score. Paying on time does.
Myth: “Closing a credit card you don’t use is good for you.” Here’s why that’s terrible advice
Don’t Cut Up Your Financial History
I had a no-fee credit card from college that I never used. I decided to close it to “clean up” my finances. The next month, my credit score dropped 40 points. I had made a huge mistake. First, I reduced my total available credit, which made my credit utilization ratio spike. More importantly, I had closed my oldest credit account. A huge factor in your score is the “average age of accounts.” By closing that 10-year-old card, I made my credit history look much younger and riskier overnight.
Myth: “Debit is safer because it’s ‘my money’.” A fraud investigator explains why this is false
Whose Money Would You Rather Have at Risk?
I once spoke to a bank fraud investigator. I told him I thought debit cards were safer. He laughed. He said, “Let me put it this way. If a thief gets your credit card number, they are stealing the bank’s money. We have a whole department to deal with that. If a thief gets your debit card number, they are stealing your rent money. You then have to fight us to get it back.” That one conversation completely changed my perspective. The safest way to pay for things is to put the bank’s money on the line, not your own.
Myth: “You need to be rich to have a premium travel card.” I got one making $40k/year
It’s About Your Score, Not Your Salary
I drooled over the perks of the Amex Platinum card—lounge access, travel credits—but I assumed it was only for high rollers. I was making about $40,000 a year. But I had a great credit score (760+) and a perfect payment history. On a whim, I applied. I was approved. Banks care much more about your demonstrated ability to pay your bills on time (your credit score) than they do about your income, especially for charge cards that require you to pay in full each month. A great score is more valuable than a huge salary.
Myth: “Checking your own credit score hurts it.” Debunked in 60 seconds
The Soft Pull vs. The Hard Pull
This myth prevents so many people from knowing their own financial health. Here’s the truth: when you check your own credit score using a service like Credit Karma or your banking app, it’s a “soft inquiry.” It’s like looking in a mirror. You can do it a million times and it has zero impact on your score. A “hard inquiry” only happens when a lender checks your score because you’ve applied for new credit, like a car loan. That can cause a small, temporary dip. So please, check your score. It’s free and painless.
Myth: “Credit cards are just a way for banks to get you into debt.” I’ve made $1000s from them
A Tool, Not a Trap (If You’re Smart)
My parents always told me credit cards were a scam designed to trap me in debt. And for people who carry a balance, that’s true. But I treat my credit card like a debit card. I only spend what I have and I pay the bill in full every single month. By doing this, I’ve never paid a cent of interest. Instead, the banks have paid me. Last year alone, I earned over $1,000 in cash back and travel rewards, just for using their tool responsibly. It’s not a trap; it’s a valuable system to take advantage of.
Myth: “If I pay my bill in full, the bank makes no money from me.” Not quite
The Hidden Engine of the Rewards Machine
I used to think that by paying my bill in full every month, I was a totally unprofitable customer for my bank. That’s not true. Every time you swipe your credit card, the merchant (the store or restaurant) has to pay a small “interchange fee” to the credit card network and your bank. This fee is usually around 2-3% of your purchase. A portion of that fee is what funds your cash back and travel rewards. So even if you never pay interest, the bank is still making money every single time you swipe.
Myth: “A debit card with a Visa/Mastercard logo has the same protection.” The fine print says otherwise
The Legal Difference Is Huge
My debit card has a Visa logo, so I thought I had the same fraud protection as a credit card. I was wrong. The logos just mean they use the same payment processing network. The actual consumer protections are governed by different federal laws. Credit cards are covered by the Fair Credit Billing Act, which gives you robust rights to dispute charges and limits your fraud liability to $50 (usually waived). Debit cards are covered by the much weaker Electronic Fund Transfer Act, which puts a greater burden on you to report fraud quickly.
Myth: “It’s better to have just one credit card to keep things simple.” Why this stunts your financial growth
One Card, One Set of Limits
For a long time, I had just one credit card. It was simple, but it was holding me back. My credit score was stalled because my “total available credit” was low, making my utilization high. I also earned only 1% back on everything. By strategically adding two more cards—one for 5% back on groceries and one for 3% back on dining—I tripled my available credit, which lowered my utilization and boosted my score. I also started earning significantly more in rewards. Having a small portfolio of 2-3 cards is a smart way to accelerate your financial growth.
Myth: “Cash is king.” Why this is no longer true in a digital, rewards-based world
The King Is Dead
My grandfather still swears by the “cash is king” mantra. In his day, it was true. But in today’s world, using cash is often a financially poor choice. Cash offers zero fraud protection; if it’s lost or stolen, it’s gone forever. It builds no credit history, making it harder to get loans. Most importantly, it earns zero rewards. Every time you pay with cash, you are forfeiting the 1-5% rebate that a credit card would give you. In 2024, responsible credit card use is king.
Myth: “0% APR means ‘free money’.” Unpacking the hidden dangers
A Timed Trap for the Unwary
I got a card with 0% APR for 12 months and used it to buy a new couch. I thought, “Great, free money for a year!” The danger is psychological. It encourages you to buy something you can’t afford today, with the promise that you’ll pay it off tomorrow. I almost fell into the trap of only making minimum payments. If you don’t pay off the entire balance by the time the promotional period ends, you’re hit with a high interest rate. It’s not “free money”; it’s a very disciplined financing tool.
Myth: “My credit score will merge with my spouse’s when we get married.” False
Your Financial Identity Is Your Own
When my wife and I got married, we assumed all our finances, including our credit scores, would blend together into one. This is completely false. Your credit history and score are tied to your Social Security number and remain yours and yours alone, for life. What does merge is your financial life. If you apply for a mortgage together, the lender will look at both of your scores, and will often use the lower of the two to determine your interest rate. So your partner’s score can definitely affect you, but it will never merge with yours.
Myth: “You need a perfect credit score.” Why a 760 is functionally the same as an 850 for most things
The Point of Diminishing Returns
My friend was obsessed with getting a perfect 850 credit score. He would agonize over a two-point drop. The truth is, once you cross a certain threshold—usually around 760—you’ve reached the top tier. For most practical purposes, like getting the best possible interest rate on a mortgage or a car loan, a score of 760 will get you the same deal as a score of 820 or 850. Don’t stress about perfection. Just aim for the “excellent” tier, and you’ll unlock all the best offers.
Myth: “The bank will automatically increase my credit limit if I’m responsible.” You have to ask
The Squeaky Wheel Gets the Grease
I had my first credit card for two years and always paid on time, but my credit limit stayed at a measly $1,000. I assumed the bank would just increase it automatically if they thought I was worthy. I was wrong. I finally called the number on the back of my card and simply asked for a credit limit increase. After a few questions about my income, they tripled my limit to $3,000 on the spot. Banks often won’t give you more credit unless you proactively ask for it.
Myth: “All credit cards are basically the same.” A ridiculous assumption
A Wrench Is Not a Hammer
Saying all credit cards are the same is like saying all tools are the same. A simple cashback card is like a solid, reliable hammer; it’s great for most basic jobs. A premium travel card is like a complex power tool; it has a lot of features like lounge access and travel insurance that are amazing for a specific purpose (travel), but overly complicated for everyday use. You have to choose the right tool for the job. Using a travel card for everyday cash back is as inefficient as trying to hammer a nail with a power drill.
Myth: “Retail store cards are a good way to get a discount.” The real cost of that 10% off
The Most Expensive Discount You’ll Ever Get
The cashier at my favorite clothing store offered me 15% off my $200 purchase if I signed up for their store card. I was tempted. But I checked the terms. The card had a staggering 28% interest rate. If I didn’t pay off the balance in full, the interest would quickly eat up, and far exceed, the $30 I had saved. These cards are a trap. They lure you in with a one-time discount, hoping you’ll carry a balance at an absurdly high interest rate.
Myth: “I don’t travel, so I don’t need a credit card.” The everyday benefits you’re missing
It’s a Life Tool, Not a Travel Tool
My friend said, “I don’t travel, so I just use my debit card.” He was missing the point. I use my credit card for its powerful, everyday benefits. I get 2% cash back on all my groceries and bills, which adds up to hundreds of dollars a year. It gives me robust fraud protection on all my online shopping. It offers extended warranties on any electronics I buy. And most importantly, it builds my credit score, which I’ll need for a future car loan or mortgage. The travel perks are just a bonus.
Myth: “Paying the minimum is okay as long as it’s on time.” The math of why this is a disaster
The Treadmill to Financial Ruin
Paying the minimum on your credit card is a financial trap designed to keep you in debt forever. I once had a $2,000 balance with a 21% interest rate. The minimum payment was only $40. It felt manageable. But if I had only paid that minimum, it would have taken me over 11 years to pay off the debt, and I would have paid an extra $2,800 in interest alone. My $2,000 purchase would have cost me $4,800. Paying the minimum is not “okay”; it is the most expensive financial mistake you can make.
Myth: “I have a bad credit score, so I can’t get any credit card.” Introducing the secured card
The On-Ramp for Rebuilding
After some financial trouble, my credit score was in the 500s. I thought I was blacklisted from all credit. I was wrong. I went to my bank and applied for a “secured” credit card. I had to put down a $200 cash deposit, and that $200 became my credit limit. The bank had zero risk. But the card looked and functioned like a regular credit card, and most importantly, it reported my on-time payments to the credit bureaus. It was the essential first step that allowed me to start rebuilding my credit history.
Myth: “There’s no point in getting a credit card if I have plenty of money in my debit account.” The security and perks argument
Rich Doesn’t Mean Smart
My friend has a great job and always keeps a high balance in his checking account. He said he didn’t need a credit card. One day, his debit card was skimmed and a thief drained $5,000 from his account. While he eventually got it back, his cash was gone for over a week. He also earned zero rewards on all his spending. Even if you can afford to lose the money temporarily, why would you? A credit card offers superior fraud protection and pays you back for your spending. It’s simply the smarter financial tool.
Myth: “Using my debit card helps me budget better.” It only shows you what you’ve spent, not what you’ve planned to spend
Rear-View Mirror vs. Windshield
I used to think my debit card was a great budgeting tool because I could see my balance go down. But that’s like driving by looking only in your rear-view mirror. It only shows you the damage you’ve already done. A proper budget, combined with a credit card, is like looking through the windshield. You plan your spending in advance, use the credit card to execute the plan, and then pay the bill from your budgeted funds. It’s a proactive approach, not a reactive one.
Myth: “The interest rate on my card doesn’t matter if I pay it off.” True, but what if you can’t one month?
The Emergency You Didn’t Plan For
For years, I paid my credit card bill in full, and I scoffed at the 22% interest rate. It didn’t matter to me. Then, I had a sudden medical emergency and a huge, unexpected bill. That month, I couldn’t pay my credit card in full. Suddenly, that high interest rate mattered a great deal. It’s easy to say you’ll always pay it off, but life happens. A lower interest rate is a crucial safety net for the unexpected. It’s a feature you hope to never use, but you’ll be glad it’s there if you do.
Myth: “I shouldn’t get a card with an annual fee.” How my $95 card gets me $500 in value
Doing the Simple Math
I was always against paying an annual fee for a credit card. Why pay for something I can get for free? Then I did the math. A no-fee card gave me 1.5% cash back. A card with a $95 annual fee offered 6% cash back on my groceries. I spend about $8,000 a year on groceries. The free card would give me $120. The fee card would give me $480. Even after subtracting the $95 fee, I still came out ahead by almost $300. Don’t be afraid of a fee if the rewards outweigh it.
Myth: “Getting denied for a credit card ruins your score.” The actual impact is tiny
A Small Dent, Not a Wreck
I was terrified of getting denied for a credit card, thinking it would destroy my score. I eventually got a denial letter. I checked my score a week later. It had dropped by three points. That’s it. The denial itself is not reported on your credit report. The only thing that is recorded is the “hard inquiry” from the application. A single inquiry has a very small, temporary impact. While you shouldn’t apply frivolously, a single denial is not a credit-ruining event.
Myth: “Debt consolidation will solve my debt problems.” It only treats the symptom, not the cause
The Shell Game of Debt
I had debt on three different high-interest credit cards. I took out a debt consolidation loan to pay them all off. It felt great to have just one, lower monthly payment. But I hadn’t changed my spending habits. Within a year, I had started to run up balances on my now-empty credit cards again. I hadn’t solved my debt problem; I had just moved the debt around. Consolidation is a great tool, but it’s useless unless you also fix the underlying behavior that got you into debt in the first place.
Myth: “You should use a debit card for small purchases and credit for big ones.” The opposite is often smarter
Protecting Your Big Buys
I used to think it was safe to use my debit card for a small coffee, but I’d use my credit card for a big TV purchase. The opposite is often the smarter strategy. That TV you buy with a credit card is often protected by purchase protection and an extended warranty, perks your debit card doesn’t have. And while a fraudulent coffee charge is minor, the real risk of a debit card is a skimmer stealing your information for a much larger fraudulent purchase later. Using a credit card for everything is the safest bet.
Myth: “Authorized users and co-signers are the same thing.” A dangerous misunderstanding
A Guest vs. a Co-Owner
This is a critical distinction. When I added my son as an “authorized user” on my credit card, he got a card with his name on it, but I was still 100% responsible for the bill. It was a low-risk way to help him. A “co-signer,” on the other hand, is completely different. If I were to co-sign a loan with him, we would both be 100% legally responsible for the entire debt. If he didn’t pay, the bank would come after me. One is like letting a guest use your house; the other is putting their name on the deed.
Myth: “My credit limit is how much I can afford to spend.” No, your budget is
The Bank’s Opinion vs. Your Reality
My first credit card had a $5,000 limit. I was only making $2,000 a month. My brain, however, saw that $5,000 and thought, “That’s how much I can spend!” This is a dangerous myth. Your credit limit is not a reflection of what you can afford; it’s a reflection of the bank’s risk tolerance. The only number that dictates how much you can afford to spend is your budget. Ignoring your budget and spending up to your credit limit is the fastest way to get into serious debt.
Myth: “The ‘best’ credit card is the same for everyone.” Why your friend’s favorite card might be terrible for you
A Tool, Not a Trophy
My friend, who travels for work every week, raves about his premium travel card. It’s the “best” card for him. I, on the other hand, rarely travel. For me, that card would be a terrible choice because I wouldn’t use the expensive perks. The “best” credit card for me is a simple cashback card that rewards me for my everyday spending on groceries and gas. There is no single “best” card. The best card is the one that aligns with your personal spending habits and financial goals.
Myth: “If fraud happens on my debit card, the bank will make me whole immediately.” The reality of Regulation E
A Slow and Stressful “Maybe”
I thought debit card fraud was no big deal. Then it happened to a friend. A thief drained his account of $1,200. The bank didn’t just give him the money back. They opened an “investigation” under Regulation E. They gave him a provisional credit, but it took them over a week to do so. For that week, he had no access to his money. In some cases, if the bank suspects you were negligent, they may not even rule in your favor. It’s a far cry from the instant, no-questions-asked protection of a credit card.
Myth: “I’ll get my FICO score for free from Credit Karma.” The score they show you is different
VantageScore vs. FICO: The Great Divide
Credit Karma is a fantastic tool for monitoring your credit report, but it’s crucial to know that the score it provides is a VantageScore. This is an educational score. Over 90% of lenders, when they are making a real decision about your loan or credit card application, use a FICO score. The two scoring models weigh factors differently and can produce very different numbers. The score you see on Credit Karma is a great guide, but it’s not the same score your mortgage lender will see.
Myth: “You shouldn’t use a credit card for gas or groceries.” This is where you can get the most rewards
Don’t Leave Money on the Table
My parents taught me to only use credit cards for “big” purchases and to use my debit card for everyday things like gas and groceries. This is outdated advice that costs you money. My biggest, most consistent monthly expenses are gas and groceries. I found a credit card that gives me 4% cash back on gas and 6% on groceries. By using that card for my everyday, necessary spending, I earn hundreds of dollars in free money every year. These categories are where the best rewards are.
Myth: “Charge cards are harder to get than credit cards”
A Different Kind of Risk Calculation
I always assumed that a charge card with “no preset spending limit,” like the Amex Platinum, would be harder to get than a regular credit card. It’s often the opposite. Because charge cards require you to pay the balance in full every single month, the bank’s risk is actually lower. They aren’t worried about you carrying a balance for years. As a result, they often have more lenient approval requirements, especially regarding income, than a premium credit card that has a high, fixed credit limit.
Myth: “Once an item is on your credit report, it’s there for 7 years, no matter what.” Not if it’s an error
You Are Your Own Best Editor
I found a collections account on my credit report that wasn’t mine. I thought I was stuck with it for seven years. I was wrong. The Fair Credit Reporting Act gives you the right to dispute any inaccurate information on your credit report. I filed a dispute online with the credit bureau, provided proof it wasn’t my debt, and they are legally required to investigate and remove it if it’s found to be an error. The seven-year rule only applies to legitimate, accurate negative information.
Myth: “A debit card helps you avoid debt.” It can also prevent you from building the credit you need for good debt (like a mortgage)
The Paradox of Debit
I avoided credit cards for years, thinking my debit card was helping me stay out of debt. While that’s true, it was also preventing me from building the credit I would eventually need for “good debt.” When I was ready to buy a house, my lack of credit history was a huge roadblock. I couldn’t get a mortgage. I had avoided small, manageable “bad debt” so effectively that I had blocked my own access to the “good debt” that allows you to build wealth.
Myth: “It’s smart to max out your card right before your statement closes to show usage.” The worst advice ever
A Recipe for a Credit Score Disaster
A friend once told me I should max out my credit card each month to show the bank I was “really using” the credit they gave me. This is catastrophic advice. Your credit utilization—the percentage of your available credit that you’re using—is a huge factor in your score. Maxing out your card means your utilization is 100%, which makes you look extremely risky to lenders. Your credit score will plummet. The goal is to keep your reported utilization as low as possible, ideally under 10%.
Myth: “You have to be a student to get a student credit card”
A “Beginner” Card in Disguise
My friend, who was 25 and not in school, was having trouble getting a regular credit card because he had no credit history. I suggested he apply for a “student” credit card. He was hesitant, but he applied and was approved. Banks market these cards to students, but they are really just “beginner” cards designed for anyone with a thin or non-existent credit file. You don’t need a .edu email address or to be enrolled in classes. They are simply a great on-ramp to building credit.
Myth: “Using your credit card for a cash advance is like using an ATM.” The fees and interest will shock you
The Most Expensive Money on Earth
I was in a jam and needed cash, so I used my credit card at an ATM for a cash advance. It was a $200 mistake. First, there was a flat “cash advance fee” of $10. Then, unlike purchases, there is no grace period for cash advances. Interest, at a sky-high rate of 28%, started accruing from the very second I took the money out. That $200 cash advance ended up costing me almost $250 by the time I paid it off a few weeks later. It’s an act of pure financial desperation.
Myth: “All cash back is the same.” 1% vs 5% is a massive difference over time
The Power of a Few Percentage Points
I used to have a simple credit card that gave me 1% cash back on everything. I thought it was fine. Then I got more strategic. I now use a card that gives me 5% back on groceries. On my family’s $10,000 annual grocery spend, the old card gave me $100 back. My new card gives me $500 back. That’s a $400 difference every single year, just for using the right card. Those few percentage points, applied to your biggest spending categories, add up to a significant amount of real money over time.
Myth: “I don’t need to check my credit report if I’m not applying for anything.” Identity theft can happen anytime
Your Silent Financial Watchdog
My friend said, “I’m not buying a house or a car, so why would I check my credit report?” A month later, he got a call from a collection agency about a credit card he had never opened. An identity thief had used his information to rack up debt. Because he wasn’t checking, he had no idea it was happening. You should check your credit report at least once a year, even if you’re not planning a big purchase. It’s the best way to spot fraud and identity theft early.
Myth: “The bank sets my credit limit and that’s it.” You can often request a higher (or lower) limit
Your Limit Is Not Set in Stone
I always assumed my credit limit was a fixed number that the bank bestowed upon me. Not true. After six months of responsible use, you can often request a credit limit increase online or over the phone. A higher limit can instantly boost your credit score by lowering your utilization ratio. Conversely, if a high limit makes you feel tempted to overspend, you can also call and ask the bank to lower your credit limit to a more manageable amount. You have more control than you think.
Myth: “Credit card rewards are a scam.” They are a calculated business expense by the bank, and you can take advantage of it
A System You Can Use to Your Advantage
People who don’t understand credit cards often think the rewards are a scam or a trick. They’re not. They are a carefully calculated marketing expense for the bank. The bank makes money from the interchange fees that merchants pay, and from the interest paid by people who carry a balance. They take a portion of that profit and give it back to you in the form of rewards, as an incentive to use their card. It’s not a scam; it’s a business model. And smart consumers can use it to their significant advantage.
Myth: “If I’m rich, my credit score doesn’t matter.” Try renting a car or getting insurance
A Measure of Responsibility, Not Wealth
My wealthy boss was complaining that his car insurance rates went up. He had plenty of money, but he was occasionally late paying his credit card bills, so his score was mediocre. Insurance companies use credit scores as a measure of risk and responsibility. The same goes for renting a car or even getting some jobs. A great credit score isn’t just about borrowing money; it’s a universally recognized signal of your reliability. Wealth can’t always buy you out of a bad score.
Myth: “Using a debit card is ‘simpler’.” Is dealing with fraud and having no rewards simple?
The Simplicity of Complications
I used to think my debit card was simpler. One card, one account. But then my card was hacked. I spent a week on the phone with the fraud department, I couldn’t access my own money, and I was incredibly stressed. That wasn’t simple. Now I use a credit card. I get a single, predictable bill once a month. I get automatic rewards. And if there’s fraud, it’s a one-call, zero-stress fix. The credit card system, while it seems more complex, has actually made my financial life much, much simpler.
Myth: “All debts are bad.” The difference between leverage and being over-leveraged
Good Debt vs. Bad Debt
My parents taught me that all debt was a four-letter word. But there’s a huge difference between good debt and bad debt. “Bad debt” is high-interest credit card debt used to buy depreciating assets or consumables, like a fancy dinner or a vacation. “Good debt” is a low-interest loan used to acquire an asset that will hopefully appreciate in value, like a mortgage for a house, or a student loan that increases your future earning potential. Learning to strategically use good debt (leverage) is a key to building wealth.
Myth: “You should apply for many cards at once to see which one you get.” The wrong way to do it
A Flurry of Inquiries Is a Red Flag
When I was first building credit, I was impatient. I applied for five different credit cards in one afternoon, hoping one would approve me. I was denied for all of them. Each application placed a “hard inquiry” on my credit report. A flurry of inquiries in a short period of time makes you look desperate for credit, which is a huge red flag for lenders. The smart approach is to research the best card for your credit level, apply for that one, and then wait at least a few months before applying for another.
Myth: “My debit card can’t go negative.” Say hello to overdraft fees
The Most Expensive “Loan” You’ll Ever Get
I thought that if I tried to buy something with my debit card and didn’t have enough money, it would just be declined. I was wrong. I had opted into my bank’s “overdraft protection” without realizing it. I bought a $5 coffee when I only had $2 in my account. The bank covered the $3 difference, and then charged me a $35 overdraft fee. I had just taken out a $3 loan from my bank with an interest rate of over 1000%. It’s the most profitable and predatory myth that banks rely on.
Myth: “The only reason to get a credit card is to spend money you don’t have.” The responsible user’s perspective
A Payment Tool, Not a Loan
This is the biggest misconception of all. For the financially responsible person, a credit card is not for borrowing money. It is a payment tool. I use my credit card for the superior fraud protection, the valuable rewards, the travel insurance, and the ability to build my credit history. I never use it to buy something I can’t afford. The balance gets paid in full every month. It’s not a loan; it’s a smarter, safer, and more rewarding way to pay for the things I was going to buy anyway.
Myth: “My credit score is a secret.” You can (and should) check it regularly
Your Financial Vital Signs
For a long time, I thought my credit score was some mysterious number locked away in a vault at the bank. The truth is, it’s easier to check than your email. Numerous free services like Credit Karma, as well as most major credit card and banking apps, allow you to check your score for free, anytime you want, with no negative impact. You should check it at least once a month. It’s one of your most important financial vital signs, and being unaware of it is like driving with your eyes closed.
Myth: “Plastic is plastic.” The fundamental, critical differences between a debit and credit card
Two Different Worlds in Your Wallet
A debit card and a credit card may look the same, but they are fundamentally different tools. A debit card is a key to your own cash. It offers minimal rewards and weaker legal protections. A credit card is a key to the bank’s money. It offers robust rewards, strong consumer protections, and the ability to build a credit history. They operate under different federal laws and present different levels of risk to you. Thinking “plastic is plastic” is a dangerous oversimplification that ignores the critical differences that can save you thousands of dollars and a world of stress.