How Many Credit Cards are Enough

While there are people who don't have any credit cards, the majority of the Americans have four to six (on average) and some individuals have over 50. Isn't it amazing? You might wonder what are all these cards good for and isn't this too much. Well, from a legal point of view there is no problem - unlike marriage, with credit cards you can take more than one – actually as many as you wish. But from a practical point of view keeping track of 20 or more separate pieces of plastic can be a full-time occupation.

Though there is no general recommendation about how many credit cards are enough, it is common sense that 20 or even more are way too many. If you constantly open new credit cards and don't close the ones you don't use, chances are that you might have so many credit cards that you don't know their exact number! And if you add your debit and ATM cards as well, the number of plastic cards in your possession might exceed several dozens.

It is obvious that having only one credit card might be somehow inconvenient, especially if it is not issued by a major issuer and therefore is accepted only by a limited number of merchants. Besides, all types of credit cards have their advantages and disadvantages, so if for example your card has low interest rates charged (which is an advantage for you), it might have a very low credit limit as well (which is a disadvantage) and therefore you need a second credit card – a one with a higher limit. So, one potential reason for having many cards is that this way you compensate for their limitations.

Getting a credit card is not so difficult and sometimes people don't think at all before accepting a new card when they are offered. A typical example are credit cards from department stores. You get the card, the store offers 15% discount. The card is a blessing, if you plan to buy a lot from this store and a curse, if you are a rare visitor there because you will certainly be tempted to buy more than you need. It is a safe bet that the second case is much more frequent.

Another frequent reason why people get more and more and more credit cards is that they believe this is good for their credit rating. No, it isn't. Just the opposite – having too many credit cards increases the risk of missing a payment and getting into debt. Additionally, if you pay maintenance charges for most or for all of your cards, this is too costly. Not to mention what happens when your purse is stuffed with dozens of credit cards and it gets stolen! You might have to call 20, 30 or even more phone numbers before you notify all your issuers about the theft. And the worst is if you can't remember exactly what cards you had in your purse at the time of the theft!

When you have dozens of credit cards, one of the rules of thumb is not to carry all of them with you. In any case, most likely you have three or four credit cards that you use 80-90% of the time, so leave the rest at home and take them only when you really need them. According to experts, the optimal number of credit cards to have is two to six, so if you manage to do well with three cards only, why bother having so many?

If you have many credit cards, it is quite likely that you haven't had the time to read their Card Holder Agreements. This is bad because there might be traps you don't know about. But it is worse if you can't find the time to read their monthly statements carefully. If you don't read their statements carefully, it is a miracle if you don't get charged for things you have not bought. Well, reading 50 statements a month is certainly not very entertaining but you've got to do it!