September 19, 2017
 
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How Many Credit Cards is too Many?

It’s time to take out your wallet and actually count how many credit cards you have. Then add the ones you have stashed in your desk drawer because they won’t fit in your wallet. You probably didn’t realize how many you’ve accumulated over the years. Is it time for credit card debt consolidation.

It’s not surprising and you’re not alone. Promising better rates, various perks, and lower fees, credit card companies have been bombarding consumers with offers via mail, internet, phone calls, and even in check out lines. You’ve heard cashiers ask “Would you like to save 10% right now by opening a [insert store name here] card?” Of course we’d all love to have 10% off our bills, who wouldn’t? Applications can now be approved within minutes. It’s no wonder why our wallets are stuffed with cards.

What this means for you
Having so many cards can be a red flag for lenders. It shows them your potential for debt and this can negatively affect your credit score and interest rate. Even if your balances are low or zero, credit agencies warn that the more cards you have, the more likely you are to rack up the debt. Is it time for credit card debt consolidation?


What’s the magic number?
Pinpointing an acceptable number of credit cards is difficult because there are many factors to consider:

· Is your debt-to-income ratio increasing?

· Are you able to keep your purchases under 50% of the credit limit?

· Do you have more credit cards than other types of loans or credit accounts?

· Are you experiencing difficulty keeping up with your credit card balances and due dates?

· Can you pay off your balances without charging them up again?

The number of credit cards to carry all depends on your ability to keep up with the payments and pay off the balances. However, the more you have, the better your chances of creating more debt. If you find yourself paying unexpected late fees or other penalties because it’s become difficult to manage you probably have too many. Is it time for credit card debt consolidation?

Try simplifying your life. Fewer cards will help you monitor your spending and bill paying activity.   It can also help you avoid deceiving yourself about how much you really owe. On top of it all, the fewer cards you have will minimize the interest and/or fees you’re likely to pay.

 

 

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