How many credit cards does one person need?
Can Having too Many Credit Cards Hurt Your Credit?
How many credit cards do you need? The answer is different for everyone. The number of credit cards a person should have depends largely on age and economic need.
Age Effects How Many Credit Cards You Should Have
Age plays a significant role on how many credit cards a person should have. Twenty active credit accounts for a 22-year-old is too many. Generally speaking, most 22-year-old adults do not make a lot of money. Having so many credit cards can lead to abuse. Credit bureaus see this as a red flag, even if payments are made on time. When people experience financial hardships, they tend to turn to their credit cards for a helping hand. A young person who typically earns less than an older person can find themselves overwhelmed by financial debt. So why is it okay for a fifty-year-old? Having multiple credit cards is tolerated with older people because they have been using credit for far longer. Older people have had more time to save and invest. Credit agencies can have as much as forty years of financial history recorded. If an older person has a history of paying their credit cards and loans on time, then they are considered a safer credit risk. Also, an individual who is fifty most certainly obtained these credit cards over a span of years. Older credit accounts that span years are better than ones that were opened six months ago. Older credit accounts that are paid on time help raise a person’s credit score and should never be canceled unless necessary. Throughout the course of life, a person should open credit card accounts conservatively. If at all possible credit cards should never be canceled. Before you apply for credit, ask yourself do I need this?
Credit Card Tip: Avoid getting department store credit cards that you do not shop regularly. It can be tempting because often the store will offer you 10 – 20% off your purchase that day if you apply and get approved for their store credit card.
Established Wealth and Economic Status Effects How Many Credit Cards You Should Have
Economic status is another important factor when determining how many credit cards you can carry without affecting your credit score. Age is irrelevant here. If you are a 22-year-old dot-com multi-millionaire you can have twenty; you can have thirty credit cards for that matter. If you have an ability to pay, the pre-approved credit card offers will come. Again financial income levels matter. If you are fifty years old and are rebuilding credit from a bankruptcy, you need to start all over again. You can apply for credit cards for bad credit. New on time payment history will begin to rebuild your credit score.
Credit Card Tip: Whether you have one credit card or fifty, never use more than 30% of your available credit line. When you use your credit sparingly, it sends a message to the credit bureaus that you don’t need and are not dependent on credit.
Finally is there a number for the right amount of credit cards to hold in your wallet? What would That number be? The right amount for a young person would be between three and five. Is that the right number of credit cards? Yes because it allows room for growth. Three to five allows you to build a credit history with multiple trade accounts. The credit bureaus will begin to be able to determine what type of credit risk you are. There will be moments in your life where it will be necessary to open credit accounts. When those moments come, you will have established a credit history that will help you get the best possible interest rate. Good credit history will not only allow you to obtain credit cards but home and auto loans. Starting with three to five credit cards allows you to grow your credit file throughout your lifetime. You will add credit accounts as needed, without damaging your credit score.
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