All About Snow Removal Daily News

How Many Credit Cards Should I Have - Coast Tradelines

Dec 19

How Much Credit Cards Should I Have? The Intersection of Credit Cards and Tradelines Explained


One of the questions that stumps people in personal finance is "How many credit card should I get?" This question becomes much more relevant when you are considering the addition of tradelines to your credit report. Let's simplify this subject by providing you with the facts and direction to make sound financial decisions.

The Conundrum of Credit Card Numbers: Why It Matters

The number of credit cards you carry isn't just a matter of personal convenience. It also affects the credit score. Although you're aware that having credit cards can help your credit score, you're probably in a state of confusion about how many cards you need to have.

The Pros and Cons of Owning Multiple Credit Cards

Before we begin to discuss how many credit card you should own, let's first look at the advantages and disadvantages of having multiple credit cards.

Advantages of Owning Multiple Credit Cards

  • If you're a credit card holder with multiple cards your credit limit could be greater. A credit limit that is high is helpful for emergency expenses or large purchases.
  • Use credit cards that reward you and cashback program to cut costs when you purchase items on a regular basis.
  • Your credit utilization ratio is likely to increase. Your credit utilization ratio is a reference to the amount of available credit that you currently use. Credit cards that are used in multiple ways can increase your credit score through dividing your balances.

Disadvantages of Owning Multiple Credit Cards

  • Multiple credit cards are a great way to increase the likelihood to overspend and enter debt.
  • It's simple to make unplanned purchases that aren't financially feasible when there are a lot of credit card accounts.
  • Controlling multiple credit cards can take some time and energy. More so if the payment schedules change.
  • The more cards you have can lead to high levels of credit utilization. A high CUR can negatively impact your credit score.
  • Different cards offer different perks. Too many cards could mean not gaining the many benefits.
  • On the other hand it is possible that having too many cards can make keeping track of payments due dates a challenge. This can result in penalties for late payments and a deterioration of credit score.

Key Points to Consider When Applying for Credit Cards

  1. Different Benefits: Find cards with various benefits, including travel rewards, cashback, or low-interest rates.
  2. Annual Fees Check to ensure that the card's benefits outweigh the annual fee.
  3. Interest Rates Lower APRs are crucial unless you're confident that you'll be able to pay off the balance every month.
  4. Credit Limit: A higher credit limit could improve your credit utilization ratio as long as you don't overdraw it.

Average Number Credit Cards Should I Have

Now that we've looked at the advantages and disadvantages of having multiple credit cards, let's consider the number of credit cards you need to have. What is too much, and how many are enough?

Financial experts suggest having 3 to 5 credit card accounts to ensure a well-rounded credit profile. This gives you a variety of benefits and helps with the ratio of credit utilization.

Factors to Consider When Deciding The Number Credit Cards to Own

There are many factors to take into consideration when deciding on the number of credit cards one should have. These include:

  • Credit score and past history: Your credit score, history and scores will determine the number of credit cards to have. You could only qualify for a couple of credit cards, if have low credit scores or have a poor credit record.
  • In addition to your expenses, your income and expenses will also be vital. If you're blessed with a higher income and low expenses, you may use more credit cards than those with lower incomes and higher expenses.
  • Financial goals and priorities: Your financial goals and priorities can influence the number of credit-cards you should possess. If you want to improve your credit score or earn rewards, think about owning many credit cards.

Recommended Number of Credit Cards Based on Different Scenarios

Here are some recommended numbers of credit cards, based upon various scenarios:

  • for those with no credit history: If your credit score is not great, you could qualify for one or two credit cards.
  • For those with a credit score of average If your credit score is average, then you could possess two to three credit cards.
  • For people with outstanding credit scores: If you have excellent credit scores you may have four or more credit cards.

How Owning Multiple Credit Cards Affects Your Credit Score

After we've discussed how many credit card you should have Let's look at how using multiple credit cards affects your credit score.

Positive Impact of Owning Multiple Credit Cards on Credit Score

Multiple credit card accounts can be beneficial to your credit score in various ways and include:

  • Increased credit utilization ratio The use of multiple credit cards may aid in improving your CUR. The spreads your balances among multiple cards.
  • Diversified credit mix: A diversified credit mix can help improve your credit score.

Negative Impact of Owning Multiple Credit Cards on Credit Score

Possessing multiple credit cards can impact your credit score the following ways

    • Higher risk of late payments and delinquencies: Having many credit cards can lead to a greater chance of missing payments. There is also the risk of being in delinquency on your accounts.
    • New and increased credit inquiries as well as new accounts When you apply for multiple credit cards can result in multiple credit queries as well as new accounts. Both of these could lower your credit score.
    • Lower average age of your account The use of multiple credit cards can lower the age average of your accounts. In turn, it could lower your credit score.
Coast Tradelines

(347) 363-1399

1412 Broadway, 21st Fl NY, NY 10018