Posts Tagged many credit cards

How many credit cards are too many?

It will depend on many factors, including your income level, credit history and other ongoing loans. Many financial advisors will tell you to keep just one or two - after all, unless you’re planning to carry pretty high balances, there’s really no point in having more than that.

American consumers, on average, have four credit cards each. A considerable number (14%) have over 10 cards each. How many do you have?

Too many cards can encourage unscrupulous spending simply by having the means to be able to do it. Credit cards can feel like cash once you’re in the store salivating at the thought of buying all sorts of stuff. As a result, buying what are otherwise unnecessary expenses can prove a little too hard to resist.

Keeping 10 credit cards also mean you’re paying annual fees ten times a year, apart from maintaining and tracking balances for ten credit cards. Cutting them down to one or two will not only eliminate those yearly charges but also save you some time by removing many card-related activities from your to-do list, from reading statements, paying balances monthly and regularly updating personal information.

When you’re cutting out credit cards, though, don’t rush into it and call up eight issuers at the same time. While you want to eliminate the temptation of extra credit, you don’t want your credit rating to suffer as a result.

Add up your total credit card limits and compare them to your existing credit balance. If cutting off one credit card will bring your balance to over 40% of your total line of credit, better wait until you pay it down further first. Cut down them one by one, ensuring that your balances, at the least, stay within 30% to 40% of your available limit.