How having too many credit cards can hurt your credit history.
There is a commercial that asks the question ‘what is in your wallet?’ This question can also be asked: How many credit cards is too many? There is no clear answer on this question. When you sit down and do your monthly budget what percentage of your income is taken away by credit card payments. If you spend more than a half of your budget on debts, it might me too much.
There are other downfalls to having too many credit cards. For one each credit card that you apply, it takes 20 points off of your credit score, that recovers only several months later. Your credit score is important because it affects the things that you will be able to do in life, like the house you will be able to live in or the car you will have to drive. If you are a young person just starting out be careful with the credit cards. Trust me when I say you are going to have to use that same credit history all your life and destroying it when you are young can lead you into a life of debt and heartache.
Many credit cards now require you to have a personal identification number (PIN). If you have too many credit cards its very hard to remember all you PINs and its not good idea to have the same PIN for several cards.
But there is one positive point in having many credit cards: you have a lot of ‘available credit’. This parameter is important for the banks. More available credit you have - better. But it’s important not to use all available credit more than 50%. Be careful.
Statistics say that average American has 8-10 credit cards. Keep tracking all of them can be tricky. Many credit card companies offer service of credit card consolidation, when you pay only one bill for all you cards. Well, taking this route can be a good idea as long as you cut up the ones you pay off and don’t take them and go on a shopping spree maxing them out again. Many credit cards offer introductory rates for the short period of time. Then after the introductory period is over then you have a credit card you can’t handle. Then you end up missing payments then are charged late payment fees and whatever other fee the credit card company wants to charge. Also making a payment late can hurt your credit score which is not an option if you want to be able to make future purchases.
Credit cards can be a great thing to have. Many things that we do these days require a credit card, but having a credit card also comes with a great sense of responsibility. Having too many credit cards can be confusing and you may loose track of your expenses. Then we have trouble making the payments which leads to additional charges. My opinion is that if you are going to have a credit card, make it only one or two and make sure you only spend what you are going to be able to pay off as soon as you get the bill.
