Have you ever thought about having too many credit cards? Or do you think you need to have another when comparing yourself to other people? So welcome! You are not the only one with this concern.
But, before starting …
It is not that there is an exact number that determines how many credit cards we should have. Actually, we all find ourselves in different situations and the right amount for everyone depends on many factors. So it is important that you consider the following points:
How do I know how many credit cards I need ?
First of all: the amount of credit cards you need compared to how many you would like to have are two very different things. This does not apply only to people who have extra cards but to those who prefer to avoid them because they believe that having a card immediately leads them to borrow.
However, even if you can walk through life without a single credit card, if you want to create and maintain a good credit history, you should start by having at least one (spending within your means and paying on time).
Remember that having a good track record allows you to access better interest rates and more favorable conditions, not only to acquire other credit cards but to access to more financing options you might need in the future .
Why have more than one card?
In addition to building your credit history, there are some reasons why it would be good to have more than one card. How to take advantage of the advantages and rewards that change from card to card.
For example, some credit cards offer travel insurance or access to VIP lounges at airports. Others are accompanied by a rewards program where through points or cashback (money) you get a percentage of your purchases that you can use in restaurants, supermarkets and other stores.
How do I know I have extra cards?
In short, there is also no rule about how many credit cards are too many. It depends on how much use you give them, how you manage with your payments, if you can pay both commissions and annuities and how much profit you are taking out each card.
If it is hard for you to keep up with the monthly payments, then it is time to pause and reconsider the use you are giving them. Another way to determine if you have too many credit cards is to add the commissions and annuities of each to see if the cost is worth it compared to the benefits.
If your answer to the above is no, then consider canceling at least the card or cards that charge you the most expensive interests. But, to avoid damaging your credit rating, keep in mind that the first step is to settle the debts you have with these cards.
So when does it make sense to buy another credit card?
Adding another credit card to the management of your finances can be a good option when you want to meet specific objectives such as transferring a balance to a card that has less interest.
If you are planning a trip, for example, you may want to look for a credit card that offers excellent rewards such as points that can be redeemed for trips or hotel stays.
Maybe you have a card that charges you very high interest but you want to keep it for its benefits. In that case you can then look for another alternative that gives you better conditions for more frequent use.
Before making a decision, remember that …
Having more than one card means having more than one cut-off date, payment date, commissions, annuities, etc. So, if you decide that you should have several credit cards, keep in mind that you will have to be very organized.
Credit cards are neither good nor bad by themselves. You just have to use them correctly to leverage your advantages and avoid debt problems.
So before asking “how many cards should I have?” Review what your financial habits and goals are. This way all your decisions will be clear and will be aimed at empowering your financial well-being.