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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 question that boggles people with regards to personal finance is "How how many credit-cards should I carry?" This question becomes more pertinent when you are contemplating adding tradelines to your credit score. Let's clarify this issue giving you the insights and guidance to make shrewd financial decisions.

The Conundrum of Credit Card Numbers: Why It Matters

The number of credit cards you carry is not just the result of personal convenience. It also affects your credit score. While you're aware that credit cards can boost your credit score, you're probably puzzled as to how many you should have.

The Pros and Cons of Owning Multiple Credit Cards

Before we get into the number of credit card you should own let's look at the advantages and disadvantages of owning multiple credit card.

Advantages of Owning Multiple Credit Cards

  • If you've got several credit cards your credit limit will be greater. A high credit limit is helpful for emergency expenses or large purchases.
  • Use credit card rewards and cashback schemes to save on things on a daily basis.
  • Your credit utilization ratio will improve. The credit utilization ratio relates to the amount of available credit that you are currently using. A variety of credit cards can boost your credit score by dividing your balances.

Disadvantages of Owning Multiple Credit Cards

  • Multiple credit cards can make you more likely to spend too much and end up in debt.
  • It's easy and convenient to make purchase that you cannot afford if you're carrying a number of credit cards.
  • managing multiple credit cards may take an amount of time and effort. In particular, if the payments timetables change.
  • More cards can lead to higher credit utilization. A high CUR can affect your credit score.
  • Different cards have different benefits. Too many cards could mean missing out on diverse advantages.
  • On the other hand having too many accounts can make keeping track of due dates a struggle. It could lead to the occurrence of late fees and damage to your credit score.

Key Points to Consider When Applying for Credit Cards

  1. Different Benefits: Look for cards with various advantages, such as cashback, travel rewards, or low-interest rates.
  2. Annual Fees: It is important to make sure the card's rewards outweigh the annual fee.
  3. Interest Rates: It is essential unless that you'll be able to pay off the balance every month.
  4. Credit Limit: A higher credit limit could boost your credit utilization ratio, provided that you don't max it out.

Average Number Credit Cards Should I Have

After looking at the pros and cons of using several credit cards, let's examine the number of credit cards you should have. How many credit cards is enough? How many are sufficient?

Financial experts recommend having 3 to 5 credit cards to have an rounded credit profile. This provides a range of benefits and can also help with the ratio of credit utilization.

Factors to Consider When Deciding The Number Credit Cards to Own

Many factors need to be considered when deciding how many credit card accounts to own. These include:

  • Credit score and history: Your credit score as well as your past experience will determine the number of credit cards you'll need. You are only eligible for a couple of credit cards, if you have a low credit score or a poor credit history.
  • Earnings and expenses: Your expenses and income will also be important. If you earn a great income and minimal expenses, you might have more credit card accounts than those with lower incomes and higher expenses.
  • Priorities and goals for your financial life: Priorities and financial goals also influence the number of credit cards you can own. If you are looking to improve your credit score or earn rewards you should consider owning a number of credit cards.

Recommended Number of Credit Cards Based on Different Scenarios

Here are some recommended numbers of credit cards based around different scenarios:

  • For people with no credit history: If you are not able to establish credit, you could qualify for one or two credit cards.
  • For those with a good credit score: If you're averaging credit score, you could be able to have three or more credit cards.
  • For those with excellent credit scores: If you have excellent credit scores you could have at least four credit cards.

How Owning Multiple Credit Cards Affects Your Credit Score

Now that we have examined how many credit cards you need we can look into how using multiple credit cards affects your credit score.

Positive Impact of Owning Multiple Credit Cards on Credit Score

The fact that you have multiple credit cards can positively impact your credit score in a variety of ways including:

  • Increased credit utilization ratio: Having multiple credit cards could aid in improving your CUR. The spreads your balances across 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

Multiple credit card accounts can hurt your credit score in these ways:

    • Greater risk of missing payments and delinquencies: having a large number of credit cards may result in an increased chance of missing payments. There is also the chance of being in delinquency to your credit card accounts.
    • Increased credit inquiries and new accounts: Applying for multiple credit cards could create multiple credit inquires and new accounts. Both can lower your credit score.
    • Lower average age of your account Multiple credit card accounts can help lower the average age of your accounts. In turn, it could affect your credit score.
Coast Tradelines

(347) 363-1399

1412 Broadway, 21st Fl NY, NY 10018