Credit Cards: How Many Should You Have?

How many credit cards should you have? Experts advise that consumers use as few as possible. The reasoning: it’s easy for cardholders to lose track of their finances if they’re juggling multiple accounts. But, on the other hand, if you currently have just one credit card, you may not be able to take advantage of the various perks offered by different types of cards. Read on to know how many credit cards you should have.

Keep in mind that every individual and their financial situation is unique. So, you’ll want to apply these guidelines to your personal situation before you make a decision.

You Are Building Your Credit Rating for The First Time

If you have non-existent or spotty credit, you’ll want to set your sights on a basic credit card. Many first-time credit card applicants opt for secured credit cards, which require security deposits. At this stage, you should, ideally, only have one credit card. Your focus should be on timely repayments and responsible credit utilization so you can improve your score over a period of time.

You Are in The Process of Trying to Improve or Rebuild Your Credit

If your credit history has a number of blemishes, like multiple repayment delays or a single more serious issue, like bankruptcy, you should keep your card count low. You may, in fact, not have much of a choice in the matter since creditors will be wary of issuing credit cards to you. So, at this point, your focus should be on using your credit card responsibly to rebuild your credit rating.

You Want to Earn Rewards

If you are looking to earn rewards for daily spending, you should know that your current everyday spending credit card is not likely to get you the maximum rewards. So, you’ll need to get specialized rewards cards that can help you earn points, cashback, or miles. There are numerous rewards credit cards, so make sure to do thorough research before you make a decision.

You Have Existing Credit Card Balances

If you have a number of high-interest credit card balances, consider getting a single balance transfer credit card. Use this card to repay your transferred balance and not to make new purchases until the purpose of the card has been fulfilled.