## For most people, credit cards are a part of everyday life. We *think* we know everything about them, but often, that's not true. Here are several things you may want to brush up on:

The rewards most credit cards offer are really a double-edge sword. Sure, they’re nice.  Who doesn’t want to earn a free airline ticket or get 2 to 5-percent cash back on purchases?

But the *value* of those rewards is quickly gobbled up if you fail to handle your credit cards properly. The only way to do that is by paying them off, *in full*, every month. If you don’t, the interest you pay will quickly add up to more than any rewards. That's why credit card companies don’t mind handing them out. It’s a big net gain for them.

The next thing you might not know is that a credit card won’t save you if you have a financial setback, such as a job loss or the need to replace an expensive item. Believing it *will* prevents you from saving up an emergency fund.

## If you don’t have money on hand to meet an emergency, you have to borrow, usually by using a credit card, at very high interest. Twenty-eight percent isn’t uncommon.

Start saving now to avoid that. Set a goal of $1500, then work your way up to one month’s living expenses. Keep going until you have three to six months’ worth in the bank. Never rely on a credit card for emergencies.

The next thing you may not know about that piece of plastic in your wallet is that you don't need it to shop online or rent a car. Once, that was probably true for renting a car, but it’s never been the case for buying online. In most cases, a debit card will work just fine.

In the case of a car rental, the company will probably put a hold of $500 on your debit card, just as they would with a credit card. You have to make sure you have at least that much in the bank, or they won’t hand you the keys.

You also don’t need a credit card to get a “reward.”  Let me explain. You can give it to yourself by using cash instead of plastic. Studies show you’ll save 10 to 30-percent on spending just by using cash. That’s because you know it’s “real money” out of your pocket. You naturally spend less and safe to say, you’ll *never* get 30-percent cash back from your credit card company.

The next thing you may not know is that having a store credit card, in sadly too many cases, won’t result in big savings. It may come with a great introductory offer, such as a 10 or 15-percent discount on your first purchase when you sign up.

The problem is that many people take the discount, but then don’t pay off the balance each month. They’re stuck with huge interest payments, wiping out any savings.

## Store credit cards have some of the highest interest rates out there. They may actually make more money *in interest* than they do selling things.

The final thing you may not know about credit cards is that you don’t need one to build credit. You can build a credit history just by paying your bills on time. Depending on your income, of course, you may even qualify for a mortgage by paying your rent, utilities and perhaps a car loan on time every month.

You may want to check with your landlord about having your payments reported to the credit bureaus. They won’t necessarily do it, but they do have that option. You can also  pay a service to report them for you.

Keep in mind, however, that the reverse is also true. You can *ruin* your credit by *not* paying your bills on time.

__There are your things to know about credit cards. We hope they help you use them wisely.__

You can also __[listen](https://www.moneywise.org/search?q=What%20You%20Don%E2%80%99t%20Know%20About%20Credit%20Cards&videos=true&articles=true&podcasts=true&posts=true&groups=true&events=true&support=true)__ to the related podcast on this topic.

FaithFi

Articles

We think we know everything about them, but often, that's not true. Here are several things you may want to brush up on.

DEBT | Aug 8, 2022

What You Don’t Know About Credit Cards

By: Rob West & Jim Henry

Where Faith Meets Finance

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