Alex Pardoe, a 25-year-old hairstylist in Detroit, is pretty good with his money. He's built a successful business in the Detroit suburbs and is on track to earn close to $300,000 this year.

But he's fallen victim to a pervasive money myth that could hurt his overall financial health: Pardoe keeps a balance on his credit card because he believes it will improve his credit score, even though he has more than enough in his checking account to pay the $2,000 debt off in full.

It's a common misconception, Ted Rossman, industry analyst for CreditCards.com, tells CNBC Make It. A 2018 survey from CreditCards.com found that of people who carry a credit card balance, 22% did so because they believed it would help their credit score.

But carrying a balance on your credit card doesn't increase your score, it just means you'll pay more money over the long term as your interest payments build. With interest rates at record highs — currently 17.73% on average, according to CreditCards.com — it's a costly myth.

"The best way to use a credit card is to make charges during the month and then pay it off in full before the statement is due," says Rossman.

About four in 10 Americans don't know how their credit score is determined, according to a recent survey from CompareCards by LendingTree. But it's not that complicated.