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How many credit cards should you have?

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What is an optimal number of accounts for me to keep? Math and accounting skills don’t always help to find the answer. I know a lot of people who boost their borrowing score with only a single credit card, while some people having a full pocket of borrowing cards drown in debts, and fail to implement payments on schedule. The primary issue users need to understand is the way any borrowing score is reckoned and their next task is to assess what credit options can really bring benefits to them. 

Advantages of holding multiple cards

Forbes reveals that on the average, credit card debt constitutes approximately 26% of real household income. This equals approximately $1276 per month, which exceeds an optimal level of credit utilization (the level which doesn’t drop borrowing score) on 12,5%. If your perennial loan liabilities exceed $1000, you’d better consider having one or more extra credit card. In fact, it stays not really arduous. You can easily find and compare different options on sites like https://effectify.com/ observing their benefits and rewards. There is a number of benefits from holding more than one borrowing account:

  • You easily manage your financial flows: Pay for groceries with one card, pay for gym and trips with another, and thus you will monitor your expenses by simply looking on your banking statements;
  • You gain more rewards and cash backs: Any recent product is a wellspring of supplementary advantages in the format of extra miles for airlines, extra nights in a hotel network or refunds for your monthly expenses;

The general problem is that not many people can easily monitor two things simultaneously. When you have a single solution, you are able to have a look at its standing and you are already familiar with the amount on your deposits and perennial expenses. People don’t like calculating and when they see something in the shop, they don’t like to recall what card to use for that thing. The more accounts you keep, the higher is the risk that you will lose control over the financial flows and plunge your borrowing score instead of enhancing it. Recall that every additional product owned becomes not a plus, it is a burden, which immediately reduces your FICO (acquiring three extra cards will occupy at least 6 months to bring back your borrowing score to the level before acquisition).

Three steps to make a decision

Having more cards has its own advantages and benefits. If you desire to build your decision without the influence of advertising and suggestions of your relatives, you’d better follow three simple steps. At first, get your banking statement and look at expenditure categories, on which you’ve spent most of your funds. After that, calculate what sum of borrowed money you use monthly. If the calculated amount is higher than $1000, get an extra card, giving you rewards for expenses, which are predominant in your schedule (certainly, if your borrowing score allows to do so). Accurate assessment of your financial situation on a regular basis will help you manage your resources more efficiently.

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