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While most Americans use credit cards (more than 160 million Americans have them), there is still a huge part of America that is unfamiliar with what it means to be a credit cardholder. Credit card issuers have a lot of information in the pages of fine print that most people don’t read (even though they should) or may not know how it applies to them.

Everyone seems to have their own view of how credit cards work, and some of these opinions are little more than myths. Nevertheless, many believe these myths, and it can hold them back from building a good credit score. But we’re here to help clear some of these up. Here are six of these myths and the truth behind them.

1. Credit cards only lead to debt.

It’s true that some people have serious problems with credit cards, but it doesn’t mean that everyone should avoid them. Used responsibly, credit cards help you build a strong credit history, which can result in favorable rates and terms when you apply for a car loan or a home mortgage. Some cardholders never pay interest charges by paying their balances in full every month.

2. You can build credit with a debit card.

Yes, you have to supply your name, address and Social Security number to get a debit card, but how you use one won’t really help or hurt your credit. Because a debit card doesn’t represent a loan in any way, it won’t even appear on your credit report.

3. Closing your credit cards will increase your score.

This myth is very common, but it’s also completely false. Your credit score improves when you have a strong credit history of on-time payments and a low level of debt (check out these credit cards for people with good credit scores). But by canceling cards, you curtail your credit history. In addition, each time you close an account and lose available credit, you increase your debt-to-credit ratio. As that ratio rises, your credit score falls. (You can see how your credit card balances are impacting your credit score for free each month on Credit.com.)

4. It will wreck my credit if I apply for a new credit card.

This myth is false for the same reasons that lead people to believe closing their credit cards will help their score. Opening up a new credit card account increases your credit history over time, while reducing your debt to credit ratio, both of which can help your credit score. Nevertheless, it’s true that opening up a new credit card will temporarily hurt your credit score, but the effect will be minor and your score essentially ignores the inquiry entirely after a year. 

5. You need to carry a balance to build credit.

You can avoid interest by paying your entire statement balance in full, and it won’t hurt your credit score. Again, you help your credit score by having a strong record of on-time payments and a low level of debt, so paying off your debt each month can only help your score.

6. You can’t get a credit card after you’ve been in bankruptcy or foreclosure.

Those who give up on credit cards after they’ve had serious problems with their credit will have a very difficult time rebuilding their score. While you won’t be approved for most standard credit cards, you can qualify for a secured credit card. These credit cards work much like unsecured cards, but it requires the a refundable security deposit before your account can be opened. But when you make on-time payments each month, you can quickly rebuild your credit and qualify for a standard credit card, often after about a year.

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