Myth: “Credit card companies wouldn't send me applications in the mail if I couldn't afford another credit card.”

Just because a credit card company knows your name and address does not mean that they know anything more about you than anyone else who sends you mail. Just like many other companies, credit card companies send out bulk mailings to large lists of people in the hopes that they will end up with some new customers.

A lot of people find it hard to pass up a credit card offer that says that they are pre-approved for a certain credit limit. These kinds of offers can be misleading to a lot of people. Just because you are offered something does not mean that is a good idea to accept. Pre-approvals are usually generated using very broad criteria based on the area that you live in or a company that you may deal with. No one actually takes the time to look into your situation to see if another credit card will make sense for you. This is your responsibility.

Before accepting any credit card offer you should ask yourself a few questions. Do I need another card? How will this card benefit me in the long run? Does this card have the features that I want, or do I just need the money? The bottom line is that you can only “afford” a credit card if you have the ability to pay off your full balance every month. If you aren’t paying off your current credit card balance every month, then you probably can’t “afford” another card—even if it is preapproved.

For some great tips on how to use a credit card and not end up in debt, click here.

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