Epitome Sum of Credit Cards to Have

Michael Blake Credit Cards, Finance & Loans

       Fun fact: The creator of the first credit card, McNamra, who had the revelation of how credit cards could replace the hassle of carrying money and would be extremely convenient, was of the view that credit cards would just be a fad. He traded his share for 200,000 dollars.

       You probably have heard of Mr. Plastic Fantastic from California, who holds the Guinness World Record for the biggest number of credit cards. He has almost 1500 credit cards and almost 1.7 million dollars of credit. Although it sounds pretty awesome having a huge number of valid credit cards. Quite frankly, it is a little absurd. It may seem like fun but even Mr. Plastic Fantastic just keeps a few cards on him. The rest of them you ask? Well, the rest are in a locker in a bank, guarded by robots.

How many cards is too many?

       So to find out how many credit cards is too many credit cards, just read on. Although there is not a definitive answer to that question. However, the right number of credit cards depends on a vast variety of financial factors.  Sometimes, having more than two effective credit cards will boost your credit score while owning very few cards will hurt your record.

Many people are of the view that the right amount of credit card one should have is six or even seven. Nonetheless there are fact and figures involved. The statistics should not be ignored when you feel the urge to apply for another credit card.

Credit Score and Its Importance:

       It is of great deal of importance to know how the system of credit score works.

  1. Credit Utilization:

Credit utilization refers to how much debt is on you, which is 20 percent of your credit score. That is calculated as the total debt you have divided by your total credit. In simple words, if your credit card balance is around 2000 dollars but you credit card limit is of 5000 dollars then you have a total of 40 percent of credit utilization. It should, ideally be under 30 percent but it is even better for the store credit if it is under 10 percent.

  • Your Payment Background:

As a credit card holder you would know that even a single late payment will stick to your credit report for about 7 years. Therefore it is very important to make the payments on time. Each payment you make on your credit card make an about 35 percent on your credit score, which is big. So if your record is not shining do not apply for more credit cards.

  • Credit Mix:

Credit mix, which controls 10 percent of the consumer’s FICO score, refers to the different kinds of accounts that create a consumer’s credit report. So having a huge range of accounts like car loan, credit cards accounts, retail accounts and even a mortgage account will work in your favor. Given, that you make payments on time.

If you are facing difficulty in managing your credit cards that’s the key to know that you have too many of them. If you fall on the list of the following, you have way too many credit cards and might want to cut back on a few;

  • You face difficulty while managing your payments.
  • Tracking your credit cards, such as, interest rates, fees, payment due dates and the charges you have made, is a huge task.

Depending on your ability to manage your credit cards, is how many you should own. It is fairly easy to have only 0ne to four, however it becomes difficult to manage them if the number exceeds six.