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Personal finance

Busting myths about personal finance

Busting myths about personal finance

Busting myths about personal finance

Good personal finance information isn’t always easy to find. Let’s bust some common myths to help you become better at managing your finances and build towards a better financial future.

Good personal finance information isn’t always easy to find. Let’s bust some common myths to help you become better at managing your finances and build towards a better financial future.

Good personal finance information isn’t always easy to find. Let’s bust some common myths to help you become better at managing your finances and build towards a better financial future.

Jun 9, 2022

Sam Lipscomb

3

min

Personal finance can be a scary topic, in part due to the fact that there’s a ton of misinformation out there. Without common core personal finance education in schools, people are left to fend for themselves. Many end up getting advice from a range of different sources that give contradictory or even incorrect information.

These dynamics lead to a lot of bad outcomes, as far too many young adults don’t have access to reliable, accurate financial advice. As a result, they rack up credit card debt, take on loans they can’t afford to pay back, and ruin their credit scores.

Fizz is on a mission to change the way that young adults build credit and manage their personal finances. There’s too much misinformation keeping young adults from making smart financial decisions. With that, let’s take a look at some of the most harmful myths out there when it comes to building credit and bolstering your personal finances.

Myth: credit and credit cards will ruin your life

Credit and credit cards can screw things up for you - when used irresponsibly. Buying things you can’t afford or taking out loans that you can’t pay back can bury you under a mountain of debt. Plus, you also run the risk of hurting your credit score.

But the truth is that credit and credit cards can’t hurt you if you don’t let them. If you pay your bills in full and on time, credit can be free to use and can help you build your credit score. Plus, you can earn valuable rewards in the process - rewards that you wouldn’t earn by using your bank-issued debit card or cash. Paying with credit cards is also a good way of protecting yourself against fraudulent activity on your card.

Myth: you need to go into debt to build credit

Plenty of people think that you need to open a credit card and go into credit card debt in order to build credit. Lots of young adults end up carrying balances on their credit cards and paying lots of interest because they think it’s how you build credit.

In reality, you don’t need to go into debt at all to build credit. Carrying a balance can actually hurt your credit score. Having an open line of credit (like the one you get with Fizz) and paying it off in full and on time are the most important things you can do when it comes to building your score. Things like credit utilization factor into your score as well, but you definitely don’t need to go into debt to build credit.

Myth: you should only get a credit card from your own bank

Lots of young adults think that because they use a certain bank for their checking and savings accounts, they need to build credit with a card from that same bank. This leads people to open cards that don’t help them as much as others (like Fizz) could.

The truth is that when it comes to building credit with Fizz or a credit card, you should find the card that makes the most sense for you. There’s no benefit to opening a credit card with the bank you primarily use. You won’t necessarily have higher approval odds by sticking with your bank - and if you’re worried about getting a card in the first place, Fizz doesn’t check your credit at all during the signup process, so you don’t have to worry about being approved.

Myth: you should keep all your money in a savings account

Saving money is certainly a good thing. Lots of people make the decision to open up a savings account, add to it when they can, and take from it when needed. Investing can seem risky, and because investments aren’t as accessible as money sitting in a savings account, lots of young adults only use savings accounts and don’t invest their money as a way of saving.

The fact of the matter is that while having a savings account for emergencies and as a way of saving up for certain purchases is a smart idea, you won’t get very much return on money saved for the long run. Most savings accounts earn around 0.01% interest every year, which doesn’t even keep up with inflation. If you have money that you plan on saving long term - like for a down payment on a house or for retirement - you should be investing that money. Investing doesn’t have to be risky either. If you spread your money out across different stocks or just decide to invest in exchange-traded funds, you mitigate your risk and are almost guaranteed to come out ahead.

Myth: you need a lot of money in order to start investing

Investing can conjure up images of high-powered Wall Street executives making million-dollar deals. So it’s easy to see why young adults might think that investing is useless without a sizeable chunk of money to play around with.

In reality, investing is easy and you don’t need much to get started. There are plenty of investing apps out there that make it easy for you to deposit saved money and invest it for the future. Your bank also may offer a brokerage account that you can use to invest your money however you see fit. As we talked about before, if saving for the long haul, you’re better off investing your money than letting it sit in a savings account.

Myth: you shouldn’t talk about money with others

Personal finance has traditionally been a taboo subject. You’ve probably heard from various adults that talking about money is “rude” or “disrespectful.” This leads to a lot of bad outcomes, including young adults having no frame of reference for how they should be handling conversations in their lives that involve money - from salary negotiations to figuring out what type of health insurance to get.

The truth is that there’s nothing rude about talking about money. Sharing information is how we learn best, and knowing about how your parents or friends budget, spend, save, invest, and insure themselves can help inform your own personal finance choices. Of course, not everyone is comfortable sharing details about their finances, but it never hurts to ask.

Myth: you don’t need to worry about your finances until you’re older

Credit scores, savings accounts, and investing aren’t exactly the coolest topics. It’s easy to think that because you’re young or because you’re in college, you don’t need to think about your financial future. Even parents can make the mistake of telling their kids that they don’t need to worry about their finances until after college.

The truth is that it’s never too early to start preparing for your financial future - and the sooner your start, the better off you’ll be. Credit scores take time to build, so waiting until you need one isn’t a good idea. Investing early can yield impressive results due to the phenomenon of compound interest, and saving money when you’re younger means it’ll be there when you need it - which is usually when you least expect it.

Myth: it’s hard to build credit and manage your money

Far too many young adults miss out on learning about their finances simply because they think it’s too hard to do. It’s easy for people to think that money is a taboo subject because it’s complicated, and this leads to terrible outcomes for young adults - from low credit scores to credit card debt and other bad decisions.

But in reality, getting a handle on your personal finances is easy. You don’t need to be an investment banker or even a finance major to open a savings account or an investment account. It’s easy to create a budget just by writing a few numbers down on a sheet of paper and doing some basic addition. It’s also easy to take to Google to find out what you need to know. Don’t be afraid!

There’s even more good news: Fizz is making it easier than ever for young adults and college students to build credit and learn more personal finance. Other cards and other banks make money off of these confusing personal finance myths we’ve covered. But at Fizz, we help you learn how to be responsible and set yourself up for success. With no hidden fees, no interest rates, no overspending, and cash back at places you love, getting a Fizz card is the best personal finance decision you can make as a young adult. So don’t wait another minute! Sign up and get your hands on a Fizz card today!

*This communication is for informational purposes only and should not be considered financial advice.*

Sam Lipscomb

Author bio

Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.

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40 Wooster Street, Level 2, New York, NY 10013. All rights reserved. FIZZ® is registered in the U.S. Patent and Trademark Office.

ShoulderTap Technologies, Inc. d/b/a Fizz © 2024. 40 Wooster Street, Level 2, New York, NY 10013. All rights reserved. FIZZ® is registered in the U.S. Patent and Trademark Office.


ShoulderTap Technologies, Inc. d/b/a Fizz (“Fizz”) is not a bank. The Fizz Debit Mastercard® (“Fizz Card”) is issued by Patriot Bank, N.A., Member FDIC, pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of the Fizz Card are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of the Fizz Card are offered and managed by Fizz, not our bank partners.


Fizz Members may choose to apply for a Fizz Card, but are not required to. Fizz Membership does not guarantee access to a Fizz Card. Application and eligibility restrictions apply. Over $300 in annual value of Fizz Card based on cash value available to Fizz Card users assuming half of all available rewards and promotions are used. Actual results may vary.


Fizz cardholders: Fizz reports your payment history on the revolving, open-end line of credit accessed by your Fizz Card. Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®  and Transunion® .
For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.


Selected customers reviews above describe individual experiences or results. Individuals in TikTok videos featured above are paid spokespeople. Selected customer reviews above describe individual experiences or results. Actual results may vary. App Store rating as of September 2024.


Credit score sliding scale feature is for informational purposes only. Credit score ranges based on information available on RentSpree. Car loan figures assume a loan value of $30,000 over 72 months and based on information available on CNN. Student loan figures assumes a $35,000 private student loan with a 10-year term and based on information available on CNBC, NerdWallet and Credible. Apartment approval based on information available on BI and RentSpree.


For people with disabilities, including those who are visually impaired, deaf, or hard of hearing, we accept messages via our in-app chat, emails at [email protected], and calls on our answering machine at (940) 260-2704. If you leave us a voicemail, please leave your name and number and a member of our customer support team will return your call.

ShoulderTap Technologies, Inc. d/b/a Fizz © 2024.


40 Wooster Street, Level 2, New York, NY 10013. All rights reserved. FIZZ® is registered in the U.S. Patent and Trademark Office.

ShoulderTap Technologies, Inc. d/b/a Fizz © 2024. 40 Wooster Street, Level 2, New York, NY 10013. All rights reserved. FIZZ® is registered in the U.S. Patent and Trademark Office.


ShoulderTap Technologies, Inc. d/b/a Fizz (“Fizz”) is not a bank. The Fizz Debit Mastercard® (“Fizz Card”) is issued by Patriot Bank, N.A., Member FDIC, pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of the Fizz Card are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of the Fizz Card are offered and managed by Fizz, not our bank partners.


Fizz Members may choose to apply for a Fizz Card, but are not required to. Fizz Membership does not guarantee access to a Fizz Card. Application and eligibility restrictions apply. Over $300 in annual value of Fizz Card based on cash value available to Fizz Card users assuming half of all available rewards and promotions are used. Actual results may vary.


Fizz cardholders: Fizz reports your payment history on the revolving, open-end line of credit accessed by your Fizz Card. Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®  and Transunion® .
For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.


Selected customers reviews above describe individual experiences or results. Individuals in TikTok videos featured above are paid spokespeople. Selected customer reviews above describe individual experiences or results. Actual results may vary. App Store rating as of September 2024.


Credit score sliding scale feature is for informational purposes only. Credit score ranges based on information available on RentSpree. Car loan figures assume a loan value of $30,000 over 72 months and based on information available on CNN. Student loan figures assumes a $35,000 private student loan with a 10-year term and based on information available on CNBC, NerdWallet and Credible. Apartment approval based on information available on BI and RentSpree.


For people with disabilities, including those who are visually impaired, deaf, or hard of hearing, we accept messages via our in-app chat, emails at [email protected], and calls on our answering machine at (940) 260-2704. If you leave us a voicemail, please leave your name and number and a member of our customer support team will return your call.

ShoulderTap Technologies, Inc. d/b/a Fizz © 2024.


40 Wooster Street, Level 2, New York, NY 10013. All rights reserved. FIZZ® is registered in the U.S. Patent and Trademark Office.

ShoulderTap Technologies, Inc. d/b/a Fizz © 2024. 40 Wooster Street, Level 2, New York, NY 10013. All rights reserved. FIZZ® is registered in the U.S. Patent and Trademark Office.


ShoulderTap Technologies, Inc. d/b/a Fizz (“Fizz”) is not a bank. The Fizz Debit Mastercard® (“Fizz Card”) is issued by Patriot Bank, N.A., Member FDIC, pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of the Fizz Card are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of the Fizz Card are offered and managed by Fizz, not our bank partners.


Fizz Members may choose to apply for a Fizz Card, but are not required to. Fizz Membership does not guarantee access to a Fizz Card. Application and eligibility restrictions apply. Over $300 in annual value of Fizz Card based on cash value available to Fizz Card users assuming half of all available rewards and promotions are used. Actual results may vary.


Fizz cardholders: Fizz reports your payment history on the revolving, open-end line of credit accessed by your Fizz Card. Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®  and Transunion® .
For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.


Selected customers reviews above describe individual experiences or results. Individuals in TikTok videos featured above are paid spokespeople. Selected customer reviews above describe individual experiences or results. Actual results may vary. App Store rating as of September 2024.


Credit score sliding scale feature is for informational purposes only. Credit score ranges based on information available on RentSpree. Car loan figures assume a loan value of $30,000 over 72 months and based on information available on CNN. Student loan figures assumes a $35,000 private student loan with a 10-year term and based on information available on CNBC, NerdWallet and Credible. Apartment approval based on information available on BI and RentSpree.


For people with disabilities, including those who are visually impaired, deaf, or hard of hearing, we accept messages via our in-app chat, emails at [email protected], and calls on our answering machine at (940) 260-2704. If you leave us a voicemail, please leave your name and number and a member of our customer support team will return your call.