How Many Credit Cards Should I Have?

0
204
How Many Credit Cards Should I Have
How Many Credit Cards Should I Have

Did you know that the average American carries and uses four different credit cards? If you think that’s excessive, you’re not alone, but you also might not be using your credit cards properly. Too many credit cards can lead to problems that require help from Freedom Debt Relief, but it’s also possible to carry too few credit cards, because lenders can’t judge how you use credit.

That’s got more than a few people asking: Just how many credit cards should I have?

For most people, the ideal amount of credit lines is around three or four. Having two credit cards and a mortgage can be ideal, because it can keep your credit utilization low. As long as you don’t carry a high balance, you’ll look like a responsible borrower to lenders.

Where people get in trouble is when they go crazy with credit cards. Too many cards or too high of a balance can put you in a tight spot quickly, leading to an immediate need for a Freedom Debt solution. At the same time, too few cards can eat up credit space quickly, leading to high utilization rates. Here’s why three is usually right around the right number!

Covering Major Expenses at Once

Some things in life require a credit card. If you’re staying in a hotel or you need to make an emergency purchase for your home, you’re likely going to have to use a credit card to cover them easily. When you use them responsibly, credit cards make it easier to obtain necessary items and fund the lifestyle you want to live.

The problem is that many people don’t use them properly. Credit cards are best used when you can pay them off entirely at the end of the month, preventing fees from accumulating. Failing that, you should at least split the payment over two months and clear the charge entirely.

But too many people get stuck in the minimum payment trap by only paying the minimum, which doesn’t begin to cover the principal. Usually, the minimum only covers the interest and a little more, leaving you stuck making endless payments.

Should you run into problems, there are options. But it’s much easier on you to avoid letting these issues begin.

Staying On Top of Debts

One reason people find themselves seeking a Freedom Debt solution is because they have so many debts, they can’t keep track of them all. When you only have two or three lines of credit, it’s fairly manageable to stay on top of things. The problems come when you add mortgages, utility bills, car loans and more regular expenses. Trying to track too many obligations can lead to one sneaking through, and once that happens, it’s easy for it to snowball.

Keeping your lines of credit low, but not too low, can help you manage them all properly. The best way to do this is to designate cards for certain expenses, depending on how they best work for your needs. If you know what each card is doing for you, that’s a good sign that you’re on top of them well enough to avoid a debt trap.

Building Good Credit History

If you haven’t had more than one card for a while, you could inadvertently be hurting your credit. That’s because utilizing too much of your available credit can negatively impact your score. If you’re carrying a balance and only have one card, you’re unintentionally sending lenders a red flag.

The best thing you can do is keep multiple cards open, use them enough to avoid inactivity and pay them off regularly. You should never have more cards than you think you can manage, but you should have at least two that have space available for important purchases. This can be a great way to signal that you’re a responsible borrower, improving your credit score!

LEAVE A REPLY

Please enter your comment!
Please enter your name here