How Many Credit Cards Should I Have?

In all of the discussion about credit ratings and credit cards that is going around, it can be easy to think that the more credit cards a person has, the better off they are bound to be. For people with a lot of money who don't like to pay cash and would rather pay a creditor, this may be the right idea but for average people who are just looking to use their credit cards to live a bit beyond their means, having a whole wallet stuffed full of credit cards may or may not be the right idea.

Why should you have more than one credit card? There are a variety of reasons why a person might feel it necessary to have more than one credit card, although it can be rather difficult to believe such. Store credit cards, gas credit cards and such can certainly add to the number of cards but people open more than one credit account for a variety of reasons. First off, it is the common belief that people open several accounts at once because they feel that having a credit card boosts their credit score. In all actuality, every time an inquiry is made to your credit, you lose several points off of your credit. It would take quite a while to make up for a 15-point loss with fifty credit cards just by making timely payments. While it may sound like a ludicrous thing, having fifty credit cards is something that all too many people are guilty of, and it is certainly a rather difficult thing for any average person to handle.

How Many Credit Cards Should I Have?

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When is it okay to have more than one credit card? Some people may function better than others with multiple credit cards, but that is to be determined on a case by case basis. The more credit cards you have, the more of a chance you actually have of damaging your credit in the process. It is nearly impossible to keep up with the payments on ten or more credit cards, and there are many people out there who think that ten credit cards is an acceptable number. Multiple credit cards multiply the amount of risk that you are taking on, as well as your creditors.

Having credit cards designated for different purposes is okay, if you know how to handle it. Every credit card requires a monthly payment, whether or not the card has been used that month and most monthly payments range anywhere from $15 to $50.

How can I decide which cards to keep and which to ditch? The hard part about getting down your number of credit cards can be deciding which ones you want to keep and which ones not to keep. Start by hanging onto the cards that you use the most, the ones that your gas company and cell phone company already have on file—convenience is a huge plus when it comes to any credit card. Also, pick the ones that have the best reward programs. If you travel a lot, a frequent flyer cards that give back plane mileage in the form of a reward are good ones to keep, as are cards that give you cash for every dollar you spend with your card.

If cost is the reason for you examining the number of cards to have, perhaps the ones with the lowest monthly payment and lowest interest rates are the best ones to hang on to. Only your individual credit and income situation can determine how many cards you need and how many to ditch, but be frugal and you should get better results.