What many credit cards should i have?

Question

Hello,
I make around 40k per year, i currently have a visa card with $11,500 limit (i owe around $4,500 on this card), i just got a AMEX blue card the other day.

How many cards can i own before it starts to hurt my credit, i am not planning on maxing them out, i just wnat to slowly build the credit limit on each of them.

Thanks

i have an interest rate of 6% so i am not getting killed on interest, doesnt seem like anyone here knows too much about this topic

Answer 1

It's been said that you should have around 3 revolving (credit cards, line of credit) trade lines and at least one installment (car note, personal loan, mortgage, student loan, appliance or furniture note) in order to provide a balance of different credit types. Also, as a rule of thumb you should use no more than 30% of your combined credit limit on all your credit cards in order to establish and maintain a good score. You have 2 major credit cards, which it great don't apply for anymore major ones. A department store card wouldn't hurt, which would round out your revolving credit. If you have student loans, a car note, and mortgage, or any combination of the 3, that will satisfy the mixture of credit that will help your score.

Above everything, make sure that you PAY EVERYTHING ON TIME!

Good luck!

Answer 2

Honestly, there isn't a magic number to have or not have.
Here is the average profile of people who have some of the best scores in the county:
~No late payments or other payment problems
~Most use less than 10% of their available limit on their credit cards
~Most have had credit hsitories for over 20 years
~Most have opened no more than one new cc in the past year
~Most have between 6 and 15 credit cards

It's not so much the number of cards, it's how you use the credit. If you sign up for a card just to take advantage of an advertised 15% discount and you never use the card again, don't bother applying for it. Obtain cards that you know you will use. Manage your accounts wisely and things will fall into place. You will eventually build your trade lines and their limits.

Answer 3

It is unwise to have more credit cards than you actually need. They are best used for revolving credit (use it instead of cash or checks and pay the balance in full every month).

The interest on your visa alone is almost enough for a car payment. If you can't pay it off fairly quickly, you should get a loan from your bank or credit union to pay it with. The interest rate will be about a third of what you're paying now, so by making the same payments that you're making to visa, you can pay it off in less than two years.

Long range financial planning involves a little strategy. If you cannot pay off your debts, get the best interest rates possible. Pay off your high interest debts first. Set savings goals and get the best possible rates of return from your liquid accounts (savings).

Once you have a comfortable "cushion" saved, begin to make long term investments--solid investments that you won't need to change for years at time (the fees involved in moving your investments around can reduce the long-term rate of return significantly).

I know that this is more than you asked for, but all of these things are connected--you really can't consider any part separate from the whole.

Answer 4

Unlike the 80's it is not good to have a ton of credit cards. You are good to go with two. I used to have about 20 cards back in the 80's/90's when the FICO guys liked seeing that kind of thing on your credit report. They don't like that anymore. One or two cards does the trick as long as you never go over 50% of your total credit line for that card because that will lower your score. Also, get rid of the AMEX and trade it in for a free card. Why would you pay to have a credit card when you don't need to. AMEX is what like $75 a year starting your second year? Not even worth it. Use your credit card on things you would have used yout Visa check card to buy, then pay them off each month. That builds your credit the right way. You do not need to carry a balance to build a credit history. You do not need to pay finance charges every month to establish great credit. Use credit wisely and it will pay off. Pay off that $4500 as soon as you can. That kind of balance will make you poor quickly. The FICO score guys like to see a nice mix of credit over time. You have a Visa, keep it, pay it off. You have an AMEX, keep it while it is free, close it before next year when they charge your the annual fee. Car loans are good as long as you only buy a car you can really afford. Go to Carmax to buy GREAT slightly used cars and use a Credit Union only to get your car loan. Banks front load interest into your loan and you end up paying way more for your loan than a credit union where you pay both principle and interest each month on your loan. Makes a big difference.

I agree most people on this site are crazy stupid about money, don't listen to 99% of them. If you want to change your financial life for the better go to Barnes and Noble and pick out and buy a book or two by Suze Orman. Her information will save your life from bad financial mistakes.

Good luck.

Answer 5

At one time in my life I had 14-credit cards and had a great score because I had either $0 balance or very little on any of them and was never late.

No I only have 3 and still have a great score because I pay them in full every month.

For the best credit score and profile you need a mix of 2 or 3 revolving accounts (credit cards) and at least 2 installment loans (cars, homes, boats or personal loans) all with good long pay history's.

Answer 6

Having multiple credit cards isn't going to hurt your FICO scores. High utilization and inquiries hurt your FICO score (along with late pays, etc.)

So if you apply for more cards, your FICO will go down because of the inquiry. It will rebound after a few months. Then it should go up if all the information on the new accounts is positive.

You will be limited in opening new accounts by the inquiries and outstandign debt amount more than by the number of open accounts that you have.

Answer 7

Get rid of multiple credit cards. Although this might sound difficult, but if you are struggling to repay on time and, juggling with the repayment dates is causing you to default- it's time to think. If there is a genuine need to keep multiple credit cards, then try to automate their monthly payments. This will ensure that you don't default unwillingly and face the negative consequences.
Multiple credit cards? No budgeting? No keeping track of expenses? No savings plan? If this is the financial regime prevailing in a borrower's life, debt consolidation simply won't work. The need of the hour is that the borrower takes control of his finances and try to become debt free. Read more from: http://www.credit-card-gallery.com/article/264,5_not_to_miss_things_for_a_good_credit_score

Answer 8

No more than 2 credit card.. U already have high limits

Answer 9

Try getting gas card, such as Shell or BP. This will help build credit without causing problems. Of course, keep the balances low as this will help raise your credit score.

Answer 10

You should always pay off your credit card balance in full every month. Its just plain stupid carrying that much on a credit card.