How many credit card is too many?

 

How Many Credit Card is Too Many? Credit cards have become an irreplaceable part of financial transactions. Their usage has become so widespread that every facet of business endeavour tries to find a way to incorporate them into their usual mode of operations. This accounts for the specialized credit cards in the system. You will find cards for travel purposes, cards for groceries, cards for gas stations, cards for auto purchases, cars for mortgages and more.

Because of the specialized services offered by these companies, it has become a common phenomenon for people to hold more than one credit card. Even though it is easy to hold different cards for different purposes, one has to be careful with holding too many cards as it could prove to be a disadvantage for many reasons. For example, if you are a student, you are likely to hold a student’s card. And then you are likely to have a card for groceries purposes. However, if as a student you decide to hold a traveller’s credit card and you do not have the wherewithal to travel often, that particular card is going to have very little usage and could score a bad mark in the “Credit Utilization Rate”

That notwithstanding, the question is just how many cards are enough and how many are too many?

The answer to the question is not a straightforward one for many reasons, one of them being that if you don’t regulate your proper usage of the various cards that you possess you could have a bad debt-to-credit ratio or a bad “credit utilization rate” of low than thirty per cent (30%) and this could be bad for you in the future. It is therefore recommended that you limit the number of cards you hold so that you can use a few cards and transact more business with the cards to have a good report of your usage.

Lending companies take all this into consideration for future credit purposes.

With all of this at the back of your mind, you must decide how many cards to hold. The question is how many is too many? For a lot of people, even three cards can be too much to manage. Therefore, depending on your situation, you should try not to have more than two (2) or maximum, three (3) cards. So it is not necessarily about the number of cards but how the cards are used in a responsible manner. If you have more than one card, keep the following in mind.

Make sure you watch your balances all the time.

Make sure you are paying various fees on time to avoid penalties.

Whenever possible, ensure that you are taking a look at the report of your credit on a regular basis, this will afford you the chance to know what lending companies are using for their work.

Lastly, you can always check your credit report with my Equifax account. This will afford you the chance to know what is happening to the way you use your cards and to make adjustments where needed.