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How many credit cards should you have?

by surfsidefinance
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Key Points
Dave Ramsey believes consumers should avoid debt at all costs.
Therefore, he’ll be the first to tell you that credit cards are bad news.
Credit cards can be used, but you should avoid collecting more than you can write down.

A credit card can be a useful financial tool that can put money in your pocket if managed properly. Unfortunately, many consumers don’t manage their credit cards well and end up with a lot of debt. Debt can be costly because credit cards charge a lot of interest.

Now to be clear, some people take on credit card debt due to circumstances beyond their control. If you lose your job and deplete your savings, you may have to use your credit cards to pay your basic bills until you get gainful employment again.

But financial expert Dave Ramsey hates the idea of consumers going into debt. And he also believes that using credit cards is a great way to get on that boat.

So if you were to ask Ramsey how many credit cards you should have, his answer would be an emphatic “zero”. But whether following his advice is worth it is another matter.

It’s really okay to use credit cards
Ramsey’s anti-credit card stance is designed to help consumers. By discouraging the use of credit cards, his goal is to help people get out of debt that costs them a lot of money in high interest payments. So when he says don’t use credit cards at all, he’s not being mean or overly harsh – he just wants you to get out of debt.

But for many people, not using credit cards at all is unrealistic. Think about the last time you booked a flight or reserved a hotel room. Wouldn’t that require a credit card on file?

Admittedly, Ramsey insists that there are ways around this situation and that debit card numbers are usually available if you ask for them. But that doesn’t always work. Also, you may encounter a situation where a specific merchant will not accept cash or debit cards, but only credit cards. This is an inconvenience you may not want to deal with.

Alternatively, credit cards can indeed be a useful tool. For one thing, they usually give consumers cash back when they make a purchase. If you pay your bill in full and on time each month, they can help you build credit. So you don’t have to listen to Ramsey and avoid getting a credit card altogether. However, you may want to keep these applications to a minimum.

Pay attention to the number of cards you have
There are no preset rules about the maximum number of credit cards you should have. For some people, it makes sense to have four different cards. For others, nine cards is manageable.

So, what you should do is figure out how many different cards you need. If one credit card is enough and provides you with a high enough spending limit, stick with one card. If you need a daily credit card and a travel rewards card, open a second card.

The way you manage your credit card use should also determine how many credit cards it is good for you to have. A person may overspend on one card, and with 10 cards in your wallet, you may be able to manage your bills just fine.

But no matter how many credit cards you decide to open, there are some basic rules you should follow. First, space your apps out, preferably for six months, because each one will affect your credit score slightly and you don’t want to get too many clicks in a short period of time.

Second, make sure you only charge what you can pay in full when it’s due (disregarding emergencies beyond your control). If you stick with this system, you may find it works well to have multiple credit cards in your name – even if Dave Ramsey would advise otherwise.

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