Do I Have Too Many Credit Cards?

Credit cards can have a big impact upon your credit scores. Because of this fact, many credit savvy consumers often wonder about the ideal number of credit cards to have open. These consumers often pose questions such as “do I have too many credit cards?” or “should I open more credit cards?” or even “should I close some of my credit cards?” However the question is worded, what the person asking the question really wants learn is the perfect number of credit card accounts needed in order to achieve the best credit rating possible. Unfortunately, the idea that there is a magical number of credit cards needed in order to reach some credit score sweet spot is a bit of a myth.

Managing Your Credit Cards

Instead of focusing your energy on finding the right number of credit cards to open, you should instead shift your focus to how you should manage your credit cards. Credit scoring models, like FICO, pay a whole lot of attention to something called your revolving credit utilization ratios. For all of you non credit nerds, revolving credit utilization ratio is a credit industry term used to describe the relationship between your credit card balances and your (open) credit card limits.  The formula used to calculate your revolving credit utilization ratio can be a little complicated, but the principle behind the formula is pretty simple to understand. It is important to keep your revolving utilization ratios low at all times. The higher your credit card balances, the worse the impact will be upon your credit scores. As a rule, you never want to revolve credit card debt from one month to the next.

How Does My Number of Open Credit Cards Impact My Credit Scores?

If you have been paying attention so far then you may already realize that the question above is actually a trick question. Remember, how you manage your open credit cards determines the impact which those cards will have on your credit. The truth is that there is no right number of credit cards to have open. You could have 20 open credit card accounts, all with zero balances, and have very good credit scores. Conversely, you could have a mere 2 credit cards which were maxed out (meaning that you charged the cards up to the full, available balance) and your credit scores would probably be impacted very negatively.

What If I Don’t Have Any Credit Cards At All?

If you currently do not have any credit cards, then it is a good idea to start “shopping” for a little plastic. CLICK HERE to compare credit card offers, rates, and benefits. Find the cards which are the most appealing to you and apply. Note: if you currently have no credit or bad credit then starting out with SECURED CREDIT CARDS may be your best option. Once you have the cards, be sure to manage them well and commit to never charging more than you can afford to pay off that same month.

You will find people who disagree with me and believe that credit cards should be avoided at all costs. And yes, credit card debt should be avoided. I agree 100% that credit card debt is a bad thing. Credit card debt will cost you a lot of money and it will harm your credit scores. However, properly managed credit cards with zero balances are an excellent way to build positive credit. Building positive credit can help to set you up for success in life (i.e. lower interest rates on your mortgage, lower insurance premiums, lower utility deposits, etc.). In fact, building healthy credit is one of the most important goals you can have.


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Michelle Black is a leading credit expert with over a decade of experience. She has written numerous publications regarding credit reporting, credit scoring, identity theft, budgeting, and debt eradication. She is featured monthly at credit seminars, podcasts, and in print. You can connect with Michelle on Facebook here