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7 Common Myths About Credit Card Rewards

7 Common Myths About Credit Card Rewards

It seems that few Americans are actually bothering to carry cash around these days, partly as a result of credit card convenience and reward programs. However, when so many credit card rewards seem too good to be true, how can you separate fact from fiction and myth from truth? Let’s get to the bottom of some of the most persistent credit card myths out there right now.

1. Applying for a Credit Card Hurts Your Credit Score

Simply put, applying for a credit card will not hurt your credit score—up to a certain point. “New credit” enquiries account for about 10% of your credit score; in other words, your credit score will always carry a record of how many credit cards you’ve applied for.

That said, most people have nothing to worry about. Unless you’re applying for a new credit card every month, you’re not going to see much of an impact on your credit score.

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2. Your Credit Score Improves When You Cancel an Unused Credit Card

Conventional wisdom seems to hold that canceling the cards you don’t use will improve your credit score; but keeping those accounts open, even if you’re not using the card, can actually work in your favor.

Your credit score is determined in part by how much of your available credit you’re actually using. For any of your unused credit cards you’re using 0% of the available credit on that account. This works to your advantage.

However, if the cards in question have a monthly fee that you don’t want to pay, closing the unused, fee-laden ones is probably the right move.

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3. You Can Earn Rewards While Carrying a Balance

One of the biggest advantages of carrying a credit card is the promise of earning rewards. To fully take advantage of card-holder perks, you want to make sure you’re paying off your entire balance every month.

The credit cards that have the best perks typically make up for it with astronomical interest rates. While you might be earning small rewards by paying just the minimum balance every month, you’re almost certainly going to be paying more in interest than you’re earning back in rewards points.

4. Earning Points and Miles Isn’t Worth It

You might be tempted to think that earning points or miles isn’t worth it. The truth is, if you pay off your balance on time every month, credit card rewards are definitely worthwhile.

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Studies have revealed that paying with cash can be a big help when you’re trying to stick to a budget. A psychological switch is flipped in our heads when we pay with a credit card, which tricks us into thinking we have more money than we do.

That said, forswearing credit cards entirely isn’t necessary. If you make a habit of paying off the balance promptly, the points you earn simply by making your regular purchases can definitely add up over time.

5. You Can’t Get a Credit Card Just for the Sign-Up Bonuses

Here’s another myth that’s false, but carries a number of caveats. There are some great credit card sign-up bonuses out there right now, which can make it pretty tempting to sign up for a card, make off like a bandit with the bonuses and then stop using the card.

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Remember what we covered above: signing up for an excessive number of credit cards (i.e. just for the sign-up bonuses) will begin to impact your credit score over time. That said, if an offer is too good to pass up, applying for a new credit card now and then for the sign-up bonuses isn’t going to kill your credit score.

6. Lowering Your Credit Limit Can Improve Your Credit

Having a large credit limit on your cards can be a double-edged sword. Maintaining a lot of available credit is beneficial to your credit score, but you might be more likely to spend since you know you have credit available.

However, before you use your credit card to make the down payment on that new Mustang you’ve been coveting, remember that a high credit limit will only help you if you don’t use it. What you definitely don’t want to do is ask for a lower limit; keeping a lot of unused credit will work in your favor in the long run.

7. Your Credit Score Will Take Care of Itself

Finally, let’s finish off with a reminder that having good credit is more complicated than just paying off your credit cards every month. Credit scores have a number of purposes, and chief among them is to help determine your overall fiscal responsibility.

Even if you’ve never let a balance carry over from month to month, there are still a number of factors that go into determining your credit score: how many open accounts you have, how many cards you use regularly, etc. Maintaining good credit requires something of a strategy, and knowing how to play the game is something we all have to learn at one point or another.

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Last Updated on August 15, 2018

30 Fun Things You Can Do This Summer Without Spending Much

30 Fun Things You Can Do This Summer Without Spending Much

Summertime can be a real strain on your wallet. The sun is out, there are people to see, places to be; it’s no wonder you might be short of funds during these sunny months. Not everything has to cost you an arm and a leg.

Take some time to go through this list of 20 cheap summer activities and make some realistic goals to complete as many as you can.

Video Summary

1. Visit a strawberry festival

Summer is prime time for tasting strawberries. More often than not, an area that grows strawberries will have a strawberry festival. Indulge yourself in strawberry pies, jams, cakes and more!

2. Have a picnic

Take your partner or your family to the local park and enjoy a relaxing picnic. Designate each person to bring one food item of their choice to add to the fun.

3. Camp in your back yard

    The summer heat can sometimes make it hard to sleep. Why not enjoy the heat outside in the yard? Pitch a tent or gaze into the night sky.

    4. Take long walks

    Discover something new where you live. Take the afternoon off from your chores and go for a long walk. You may be surprised by what you discover.

    5. Break a world record

    Breaking a world record doesn’t have to be time-consuming. You could even break one on your lunch hour. Give it a go!

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    6. Go on a bike ride

    The number of bike paths on roads in big cities has increased dramatically over the years. Take advantage, and enjoy the summer breeze.

    7. Join a gym class

      The gym is not everyone’s idea of a good time, but why not go with a friend a join a class? Spinning, yoga and step classes are always more fun with friends, and a lot of gyms allow you to pay-as-you-go.

      8. Find a new hobby

      The summer is the perfect time to find a new hobby. Serotonin (our body’s natural “happy” hormone) is produced by the sunshine and will be at a yearly high, which is great for when we want to tackle something new.

      9. Join a sports team

      Not all sports teams are competitive and require huge amounts of your time. Join in the fun with like-minded people, get fit, stay healthy and make some friends along the way.

      10. Make a slip ‘n slide

        Gather your friends, some plastic sheeting, a hose, washing up liquid if desired, and make a huge slip ‘n slide just like these guys. Granted, yours won’t be as big, but you get the idea… it’s fun!

        11. Make a treasure hunt for your kids

        Today’s digital world sees our children more often than not playing inside than outside. Why not create a sense of adventure by making a treasure hunt? Only rule? It has to be outside.

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        12. Visit a free festival

        Towns and cities are awash with free festivals, with themes from film to science. Scout your local area and discover something new.

        13. Visit the zoo

          Let’s face it: we love animals. While browsing news websites and social media networks you’re bound to come across a few pictures of cats. Take a trip to your local zoo for a better experience.

          14. Take a road trip

          Enjoy the open road with a few friends and take a road trip somewhere–anywhere. Just go out and enjoy the sunshine!

          15. Play ultimate frisbee in the park

            Frisbee is always great fun down the park, but why not turn it into more of a competitive sport by playing ultimate frisbee?

            16. Make your own ice cream

            Ice cream is a very versatile dessert. Make a sandwich, enjoy a cone, or simply just enjoy a bowl full. Better yet, making your own ice cream allows you to create any flavor you want.

            17. Invite your neighbors over for a BBQ

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              When was the last time you invited your neighbors over? Do you even know them? Now’s your chance. Just ask each person to bring a food item so costs don’t mount up for you.

              18. Get a summer job

              For many students, summer is the time for relaxation and fun. But who said earning money and being productive isn’t fun? You only get out what you put into a situation.

              19. Attend a charity event

              Attending a charity event is a great way to raise funds and awareness for a cause, meet new people, and generally have a good time. Search for your local charity event today.

              20. Visit a national park

              National parks are a great way to explore nature and learn something new. You could even volunteer and make a difference in helping restore natural habitats.

              21. Visit your local comedy club

                Local comedy clubs are extremely underrated. They are cheap to attend and no doubt you’ll have a barrel of laughs.

                22. Make your own hammock

                  Hammocks are very relaxing, are perfect for summer afternoons and are surprisingly easy to make.

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                  23. Read in your new hammock

                  Now you have your very own hammock, the only thing left to do is enjoy it. Grab your favorite book and read to your heart’s content.

                  24. Watch a movie outside

                  Movies are great. Relaxing outside in the evening is great. Put them together and you’ve got a perfect combination. In D.C, Maryland and Virginia this summer, for example, you can enjoy a huge number of movies outside.

                  25. Take a hike

                    Hikes are a great way to keep fit and see more of Mother Nature. There are countless trails available for you to explore. Why not try some this summer?

                    26. Learn how to fly a kite

                    As a child, you probably had a kite and haven’t touched it since. Why not dust it off and attempt to fly it? It’s tricky, but well worth the challenge.

                    27. Work out at the park

                    American cities are full of parks with ample space for a work out session. No doubt you’ll be happier to work out in the sun rather than a crowded gym.

                    28. Take your dog to the beach

                      One of the many joys of owning a dog is taking him or her for long walks during the summertime. This joy is enhanced when visiting the beach, for both you and your dog.

                      29. Make a summer smoothie

                      Healthy, delicious and perfect for the summer. Not only that, there are countless recipes ready for you to try.

                      30. Attend a free yoga session at the beach

                      No experience needed and all skill levels are welcome. Take yourself and a buddy down to the beach and try some yoga. You’ve got nothing to lose!

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