How many credit cards do you really need? The simple answer is three or two. That’s what we can gather from the data released by the latest survey of people with good credit scores. But few things in life are simple, and none of them are related to finances. Therefore, if you are wondering whether you should open a new credit card or close some of the ones you have active, I strongly recommend thinking about how much credit you can truly handle.
Why Are You Using Credit Cards?
Many people use credit cards to rebuild their credit, which is a valid strategy if done right. If this is what you are after, you definitely should have two or three cards to use regularly. The number of cards as well as the types of cashback you get on them will matter for your credit rating.
But there’s no denying the fact that making payments on time is the most important thing you have to do. If you fail, those cards will start working against you. And that’s why you shouldn’t rush and open a dozen cards in the hopes of improving your credit rating.
The 30% Rule!
Financial experts, who are much more knowledgeable in this area than I am, recommend keeping your credit card use at below 30%. They say that you should always aim to keep your balance within 10-30% of your credit limit. That’s the best way to rebuild your credit score based on the protocols used to calculate it.
So now, let’s get back to the question of how many credit cards you need. Considering the fact above, it’s simple, you need as many as you can realistically maintain based on those numbers. Can you only handle one? Then, this is what you should get. If you can keep the right balance and pay off all your debt when necessary on five or even ten cards, do it. Just don’t forget that where credit’s involved, it’s best to go slow.