So you say you just maxed out your credit card and unsure what steps to take next. Such an event could be crucial to your financial status and lower your credit score if you don't act fast. This was your only card and you have always given thought into applying for another card, maybe even two more, but just never got around to it. Before getting putting a financial burden on yourself let's explore how many credit cards are too many to have.
ARE YOU A HEAVY SPENDER?
One of the main factors in determining how many credit cards you should own is your spending habits. Charging a lot on your cards is not that bad, it just depends on how long it takes you to pay back what you spend. If you are always mismanaging your charges, then that should be a red flag. The more cards you have, the riskier it will be for you to relieve debt and it may end up damaging your credit score. Adding the extra financial risk could cause you more problems than you want to create for yourself.
If you are unsure how to go about budgeting yourself and managing your money then you can always seek help from professionals. It is very important that when you have credit cards you can manage your other financial obligations as well. Getting in too deep if you are a heavy spender can leave you with large bills that might be hard to pay month to month.
LEARN A SIMPLE DEBT RATIO
Make it a rule never to go over 50% of your credit limit. If you have a credit limit of $6,000 then start to cut back once you reach $3,000. That way you are always aware of your situation. Plus you don't have to worry about reaching your limit and stalling your credit. This debt ratio can help you minimize the need for added credit cards. Plus it shows you that you can manage things without applying for extra cards.
BE AWARE OF THE STORE CREDIT CARD
Now here is a trick in figuring out the right amount of credit cards you should have. Store cards that save you 10% off each time you shop may look good, but looks can be deceiving! Each time you open one of those accounts, 20 points are taken off of your credit score. These cards may not be the best idea when looking for credit cards that can improve your score if it is low. If you do feel like you should open one of these cards for the holidays, pay it off immediately and close it. Having the card hanging around can be tempting and if not paid off can hurt you. If you cannot pay these cards off for a while, then steer clear. The interest that may add up could be higher then that 10% you saved.
MANAGE YOUR CARDS
Make all your payments on time. Waiting is not an option because it can hurt your credit score and you can pay more in interest. How many credit cards are too many? The best answer for that question is, more than you can handle. Do not get yourself into a financial burden that you can not handle. If you are financially stable then you might be able to handle 3 cards, but for some this is overwhelming. If you have many other bills a month then 1 or 2 cards might be more feasible. You should always make sure you are using legitimate cards from creditable companies. Visa, MasterCard, American Express are respectable credit companies that can be trusted with good service. Stay smart on budgeting your cards and it will payoff in the long run and cause less hassles.
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