For example, here’s one myth that I was discussed in a recent article: “Anyone can get their credit card bill reduced”.  Well that’s certainly a myth.  Take a look at the following article for more credit card myths that you should know about.

8 Credit Card Myths You Need To Know

Credit repair agencies claim that they can remove bad entries from your credit report. But did you know that you can often have them removed yourself at a much lower cost? There are two methods by which you may be able to get negative entries removed from your report.

Tip Number 1: File a Dispute with the Credit Bureaus

The Fair Credit Reporting Act (FCRA) requires credit bureaus to investigate any item on your credit report that you dispute. If the information is found to be false, inaccurate or unverifiable, it must be corrected or removed from your report. The bureaus have 30 days from the time they receive notice of the dispute to complete their investigation.

If there is any inaccurate information on your credit report, a dispute is certainly in order. But some people have had luck disputing items that were in fact accurate, including judgments, collections accounts and repossessions. If such items are not verified by the creditor (or the court in the case of judgments) within the time limit for investigation, they must be removed.

If you decide to dispute a legitimate entry, simply write a letter to each of the credit bureaus stating that you dispute that entry. No explanation is required. But keep in mind that if the entry is verified, it will remain on your report. And if the creditor verifies the information after the 30-day time limit, the credit bureau may reinstate the entry as long as they notify you at least 5 days before doing so.

Tip Number 2: Negotiate with Creditors

Dealing with creditors can be intimidating, especially if you’re not on good terms with them. But speaking to your creditors directly may help you get negative information removed from your credit report.

If you only have a late payment or two on your account, a creditor might be willing to remove the derogatory information once you’ve resumed a regular payment schedule. If you’ve experienced repossession or had an account turned over to collections, payment in full might persuade them to remove the negative entry. It sounds like a long shot, but you never know until you ask. Requests to remove late payment information may be made after you’ve brought you account current. But if you’re hoping for removal of a repossession or collection action, it’s best to negotiate a deal before you pay anything.

If You Can’t Get the Bad Entries Removed

There is no guarantee that disputing information on your credit report or negotiating with creditors will get negative items removed from your record. If it doesn’t, the best thing you can do is try to build up some positive information on your report.

The first thing you need to do when trying to rebuild good credit is bring past due accounts current. Try to work out a deal with your creditors to accomplish this, or talk to a credit counseling agency. But don’t miss payments on current accounts to put money toward those that are past due. If it comes down to paying one or the other, keep the current account current.

Once you’ve brought all of your accounts current, put a priority on keeping them that way. Making your payments on schedule will raise your credit score, and with the passage of time, the good entries may outweigh the bad.

Potential Benefits of Credit Cards

A Fast, Unsecured Loan: Credit cards enable you to buy goods or services now and – unlike debit cards – pay later. Your payment won’t be due for at least 21 days after your monthly credit card bill is mailed or delivered.

Options to Avoid Interest: If your card has an interest-free grace period and you pay the balance off each month, you won’t be assessed finance charges.

Building a Good Credit Record: If you’re careful about how you manage your credit card, especially by paying your bill on time, your credit score will go up and you may qualify for lower interest rates on loans and credit cards.

Potential Concerns of Credit Cards

Interest Charges: If you don’t pay your card balance in full each month or your card doesn’t have an interest-free grace period, you will pay interest. This can be costly, especially if you only pay at or near the minimum amount due each month. You also may be subject to interest rate increases. However, as of August 20, 2009, you must be told at least 45 days before any rate increases or other significant change in account terms takes effect. If you don’t agree with the new terms, you generally can cancel the card, pay off the balance over time at the original rate and terms, and avoid the new terms.

Overspending: “High credit limits and the ability to earn rewards for using a credit card can make it easy for some people to spend beyond their means,” cautioned Janet Kincaid, a Regional Ombudsman at the FDIC. “Don’t get caught in the cycle of buying things you don’t need or can’t afford just to get points for future travel or other rewards. Without even realizing it, you may end up paying more in interest than you’re earning in rewards.”

Fees: Credit card fees are likely to include those for paying late and going over the credit limit. Some cards also have annual fees.

Consumer Protections for Credit Card Users

Federal law limits your losses to a maximum of $50 if your credit card is lost or stolen, although industry practices may further limit your losses. You are also protected against billing errors. In addition, federal law may allow you, under certain circumstances, to withhold payment on defective goods until the problem has been corrected. These protections are a big reason why most experts recommend credit cards – not cash, checks or debit cards – when paying for big ticket items or services that you want to know will work as promised.

Also, the Credit Card Accountability Responsibility and Disclosure Act of 2009 is intended to help shield consumers from abusive fees, penalties and interest rate increases. Some provisions of this law took effect August 20, 2009, but most start next year. For example, starting February 22, 2010, a card issuer can’t allow you to go over your credit limit and then charge a penalty fee for having done so unless you explicitly agree to this practice in writing. In contrast, most debit card issuers will assess a fee for making a purchase or other transaction that exceeds your account balance.

Final Words of Wisdom

Credit cards may be especially useful if you want to pay for things when your bank account balance is low or to take advantage of a no-interest grace period.

There’s also a different type of credit card, a “charge card,” that must be paid in full each month. “A charge card may be a good option for people who are not planning to carry a balance and want to avoid interest charges,” said Creamean. “However, if you use your charge card and then have a financial setback, you still need to pay in full each month, whereas with a credit card, you could carry a balance forward until your situation is better.”