How Many Credit Cards Should You Have?

Published January 9, 2013 by

For many people, credit cards are kind of like potato chips in that they can’t have just one. This fact inevitably leads to the question of how many credit cards should an individual have? The answer? It depends.

What You Do and How You Do It

Consider credit cards in the same way that you would consider your style. How do you use your style? How do you flaunt it? Are you conservative with your style? Are you outrageous with it? Now consider credit cards. Are you conservative or outrageous with your credit cards, or perhaps somewhere in between? Your response to this question should be a key factor in deciding how many credit cards you should have.

It’s About the Economy . . .

Your personal economic situation also should play a prominent role in helping you figure out how many credit cards you should have. Take into consideration your job, your job goals, and how much debt you are currently carrying. All this put together basically constitutes your very own economy, and the health level of that economy should help you determine if credit cards basically act as a help or hindrance to you.

It’s About What and How You Use

Credit cards aren’t magical; they don’t represent free money. At the same time, they are almost magical in that they can lure you in and once you are in their grasp, it can be difficult to walk away from them. That being said, how you use your credit cards will also be a determinant in how many cards you should have.

Many consumers these days are relying almost exclusively on credit cards. This strategy involves using the cards in lieu of cash and paying them off to zero balances at the end of every month. If this is a strategy you have adopted, a good number of credit cards to have would be two or three at best. One card will act as your workhorse while any additional cards will act as buffers should emergencies arise. The strategy requires discipline unless your personal finances can withstand varying payments.

A different strategy is to have one credit card and use it on an emergency basis only. This covers situations where buying-power need is immediate and you cannot wait to purchase a particular item. When deciding whether maintaining an emergency credit card is right for you, you need to honestly look at your life and see if you often find yourself in emergency situations.

Your Decision?

The decision on how many credit cards you should have is a weighty one. Remember that with credit cards come temptations, and the temptation to spend frivolously needs to be tempered by the reality of how much money you have in your bank account to cover credit card payments and eliminate credit balances. If you have the discipline to manage a credit card, then use multiple cards with gusto. If your finances will strain under additional payments, then keep your credit cards to an absolute minimum until your financial health improves. One more thing you should remember, though, is that keeping open credit cards is a worthwhile practice to engage in, as it establishes and maintains your credit score and potentially sets you on a good financial path.