October 5, 2006 4:33 AM
How Many Credit Cards Do You Really Need?
I personally carry over 20 credit cards, and this allows me to find great deals like 0% APR balance transfer all the time. My advice is: if you are organized enough to handle the paperwork, you should get as many credit cards as you need.
Experts indicate that most Americans carry between five and ten credit cards in their wallets, with some plastic-loving souls holding as many as 50 credit cards at one time. (Although perhaps only George Constanza’s massive wallet could contain all those cards simultaneously!) But what is the right number of credit cards for you? Should you have more (or fewer) credit cards than you do right now?
The answer is that there is no exact number of cards that you should have at a given time. According to Experian, one of the three major credit reporting agencies, there is no right number of credit cards for everyone. Instead, your ideal figure depends on the combination of how much you spend and how much debt you can pay off. You need to consider how many cards will best allow you to build a solid credit history.
In terms of the balance on the credit cards you hold, the ideal range is between 25% and 50% of the available credit on each credit card. Once you pass that level, potential creditors begin to view you as a risk for repayment, in the event you encounter a major financial obstacle, with your ability to repay falling as your debt rises. If you make a major purchase that surpasses 50% of your credit limit, it is a smart decision to split the purchase between two cards. Being able to do this is one of the benefits of having more than a single card. Lenders do not like to see that your credit card is almost maxed out, as that causes them to consider you a risk ?someone who is using too much credit and has trouble paying off debt.
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