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How Many Credit Cards Do You Need?

You’ve seen it before: An egomaniac at the checkout rolling out a bevy of bank or department store credit cards. Sure it looks impressive, but having so many cards can mean having an obscene amount of debt and limit your chances for a loan. Having all those cards open and carrying a balance could diminish your chances of getting money when you need it most. If you carry a lot of debt, you might be denied for a bank loan even if you have a consolidated credit limit of $100,000.  How many credit cards you need will vary from person to person, but the total should be at most only a handful.

Make no mistake: It is best to keep a minimum number of credit cards, but having too many credit cards can be just as detrimental to your credit as having none at all. And, keeping balances on too many credit cards is a logistical nightmare. How likely is it to miss a payment? Miss one and creditors are hounding you to pay up. And the grace period for payment has been reduced to as few as ten days. Paying multiple credit card bills within 10 days of the due date can be daunting, and if you fail, you are penalized with late fees, farther compounding the debt.

It’s common sense: Trying to keep up with the payments on two large balances is far simpler than trying to keep track of several smaller balances. And isn’t it easier to track your spending on fewer cards? The more credit cards you carry, the more you can spend; the more you have to spend, the more debt you can incur and the less likely you are to be approved for a new loan or mortgage.

Remember, too, that each credit card carries different interest and penalties. Miss a payment on a credit card with a high balance and high interest rate, and you’ve wiped out your savings. High-interest credit cards limit your ability to build wealth; you are spending your money reducing debt that could take a lifetime to repay.

Keep yourself in check; resist opening several credit cards and being swallowed with debt. And for the cards you must carry, be smart and carry cards with lower interest rates.

Credit card companies want you to think that you need the status of multiple cards. Remember: They want money, your money.

Minimize the cards and debt you carry, and you can repay your debt on time. You will keep your financial house in order and your mind at peace.

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. ' He spent several years reading as many financial advice books and blogs as he could. And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created to help others do likewise!

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