Do you sign the backs of your credit and debit cards? How about tearing up or shredding your old bank statements? In the age of massive data breaches and hackers galore, does that sort of thing even matter?

While there are countless financial myths and urban legends, it can be difficult to know which ones are actually true. Sadly, confusion about best safety practices for credit and debit cards reigns supreme.

Much of this confusion stems from seemingly never-ending financial fiascos. Perhaps you were among the 40 million customers affected when Target, despite its best security measures, experienced a data breach. Unfortunately, fraud and errors are inevitable. When problems happen, they can negatively affect even the most stellar credit score.

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A lower credit score can hamper your ability to borrow money, open a checking account, rent an apartment, and even get a new job (as crazy as that might sound). Knowing how to separate fact from the fiction in the financial world has become increasingly important in the age of misinformation.

Taking Control of Your Financial Safety

Credit card safety starts with knowing what will happen to you if something does go wrong. That means reading the fine print to know what you are agreeing to when you sign your credit agreements — something relatively few people take the time to do.

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A recent report found that a jaw-dropping 75 percent of Americans don’t read their credit card agreements. Considering contracts can top out at 5,000 words and aren’t typically written in plain English, it’s an understandable mistake. Most reputable card issuers have dedicated fraud departments staffed by teams that watch out for you and offer protection if errors or fraud occur, but it’s much better to know the specifics of your contract.

One of the most common assumptions cardholders make is expecting their lender to monitor and handle any fraudulent charges. Reputable lenders will let you know about suspicious activity, but that doesn’t relieve you from paying attention to your statements. Cardholders are only liable for charges they know are supposed to be on their cards, but they’re also obligated to report any suspicious charges to their credit card company as soon as possible.

If errant charges go unpaid and unreported, you’re responsible for them. A failure to address these charges can quickly spiral out of control, leading to hefty fees and interest charges. Your lender might even increase the interest rate on your account because of the outstanding balance.

In this case, ignorance isn’t a viable defense. It’s necessary to understand the cold, hard facts about your credit cards instead of believing the endless rumors and speculation swirling around the financial realm.

Debunking 5 Urban Legends of the Credit World

Beyond skimming agreements and failing to regularly monitor statements, the biggest risk for many cardholders is what they think they know about credit cards. These longstanding myths can lead to unsafe credit card behavior, as well as unnecessary precautions. A dose of reality should be all it takes to debunk a few of the more common myths:

1. Credit cards don’t travel well. 

Contrary to popular belief, your credit card protection often follows you when you’re abroad. Some card companies even offer trip cancellation insurance and other travel assistance, which can be a lifesaver when you’re far from home. Credit cards can actually be a helpful tool in the fight against the uncertainties of travel.

2. Lower credit limits are better. 

Quite a few people believe a lower credit limit means you’re doing something right. Wrong. When a lender increases your credit limit, it doesn’t mean you’re overspending — it actually indicates you’re a good credit risk.

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Assuming your spending doesn’t increase along with the limit, a higher credit limit can improve your credit utilization ratio, a key element of your credit score. The lower the ratio between your outstanding balance and your credit limit, the more positive effect it has on your score.

3. Maxing out is fine if you pay in full each month. 

It’s obviously good to pay your balance in full at the end of every month, but the aforementioned credit utilization ratio makes this one problematic. By maxing out your card, you’re effectively using every last bit of your credit. Instead of using all your available credit, a better rule of thumb would be to restrict your credit utilization to about 30 percent or less.

4. Protecting your CVV number is crucial. 

The card verification value (CVV) found on the back of your card is required for many online transactions, so people assume it’s the most important thing to safeguard. In truth, many sites don’t require a CVV. If someone has your name, expiration date, and card number — which they can get from old statements and receipts — they have everything they need to make charges to your account on many websites. It’s never a bad idea to conceal your CVV, but you should protect yourself even more by shredding old financial documents before you toss them to the curb.

5. Signing the back of the card doesn’t matter.

An unsigned credit or debit card is a bit like a blank check. You’re basically inviting troublemakers to steal your identity. A thief could sign the back of your card and make purchases at retailers without any concerns about matching your signature.

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If your signature is on the back of your card, it serves as a deterrent and gives merchants who compare signatures a chance to stop fraudulent purchases before they happen. Better yet, write, “See ID,” on the back of your card to encourage merchants to request a matching driver’s license.

The recent widespread adoption of EMV chip technology is good news, as it provides an extra layer of security. But all the security in the world doesn’t relieve cardholders of their responsibility to closely monitor activity on their accounts. Ultimately, you’re still the last line of defense against fraud or mistaken charges.

Ignorance might be bliss, but it’s not going to protect you when fraudulent charges pile up. By demystifying credit cards and cutting to the truth of the matter, you’ll be better equipped to spot problems and resolve them before they can do any real damage.

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Darin Namken is an innovative entrepreneur who co-founded CreditSoup in 2000. He serves as CEO, steering the mission of the company and specializing in new business development. CreditSoup was founded as a borrower’s marketplace for consumers seeking various financial products, providing people with information and credit solutions to meet their needs.