There are a few misunderstandings about credit cards that need to be cleared up. If you want to get a handle on your credit card debt, here are a few things you should keep in mind. The first myth is that your credit limit is your spending limit. This is untrue because you don’t want to reach the maximum on your credit card unless absolutely necessary. Charging too much and using all of the available credit on your card can hurt your credit score. The second myth is that when your credit limit increases, that means that you can charge more onto your credit card.

While this may be true, keep in mind that credit card companies stay in business by getting their customers to pay more in interest. If you can prove that you can pay your bills on time over a period of time, they will see if they can make more money from you by seeing if you charge more. The higher the balance on your credit card, the more interest they earn, hence the reason for the increased limit. Keep in mind that you still have to pay back those credit card companies, it’s not free money after all. If you let yourself be tempted to go on a shopping spree, you may find yourself even further in debt.

Another myth is that you are stuck with your credit limit forever. If you have kept a good record with your credit and you can prove that you are in good financial status, you can request a higher credit limit from your credit card company. Some companies will let you go over your limit for a fee but other companies will require you to sign a form first. The last myth is that if you pay all of your credit card debt, then your credit will go up by itself. For some companies, the reverse is true. Your credit limit may actually go down if you do the right things and the worse part is that they will do that without notice. Keep a close eye on your credit cards because if the limit goes down and you go over it, you will be subject to huge fees.