| One of the most often asked questions about | | | | |
| credit cards is 'what's the ideal number of | | | | There are other reasons to limit the number |
| credit cards to have?' The question is asked | | | | of credit cards you carry as well. When you |
| as if there is a magic number that will tell | | | | have one credit card, it's easy to keep track |
| lenders that you're credit-worthy without | | | | of your spending and your account due dates. |
| hacking away at your credit rating because | | | | Add a second credit card, and you're still |
| you have too many credit cards. The reality | | | | all right - but what happens when your one |
| is not that simple. | | | | credit card turns into 15 in your wallet? At |
| | | | that point, you're at serious risk of |
| The ideal number of credit cards is a very | | | | accidentally missing due dates out of sheer |
| individual thing. It depends on a combination | | | | forgetfulness - and that will kick up your |
| of factors, including what type of credit | | | | monthly charges, sometimes on more than just |
| card each one is, your monthly income, the | | | | the affected card. |
| amount of credit available to you and your | | | | |
| history of making payments on your credit | | | | So what is the ideal number of credit cards? |
| cards. According to the NS&I Quarterly | | | | Here are some rules of thumb to help you |
| Savings report issued in June, the credit | | | | decide if you have too few, too many or just |
| card UK market is doing booming business, | | | | enough: |
| with 4.1 credit cards for every adult in the | | | | |
| UK. So is 4.1 the magic number? | | | | 1. Your monthly credit card payments should |
| | | | be no more than 25% of your monthly income. |
| In most cases, say financial experts, the | | | | |
| right number of credit cards is between 2 and | | | | 2. If you've forgotten to make a credit card |
| 6. Of those, you should have at least one | | | | payment because you just MADE a payment - but |
| major credit card - Mastercard, Visa or | | | | it was to another company - you probably have |
| American Express - as those are accepted | | | | too many cards. |
| nearly everywhere you go and are the most | | | | |
| genuinely helpful in the case of an | | | | 3. If you can only make the minimum payments |
| emergency. Other credit cards you may carry | | | | - and sometimes not even that - then you |
| include a store credit card - which | | | | should consider consolidating some of your |
| generally charge interest at whopping rates | | | | debts onto one credit card. UK companies |
| close to 30% - and a gasoline card. More | | | | offer many balance transfer cards that can |
| important than how many cards you're | | | | help you consolidate your debts. |
| carrying, though, is how much you owe on | | | | |
| them. | | | | 4. If you're not sure which cards are at or |
| | | | close to their limits, you probably have too |
| One of the things that factors into your | | | | many. |
| credit score is your debt/credit ratio. The | | | | |
| credit bureaus compare how much credit you | | | | 5. If your total debt is less than half of |
| have available to you in relation to how much | | | | your total available credit, you're probably |
| you're currently using. If you have one | | | | in pretty good shape. |
| credit card with a credit limit of £1000 | | | | |
| and you're carrying a balance of £500, | | | | There are some really good comparison sites |
| then you're using 50% of your available | | | | where you'll find all the best deals on offer |
| credit. Is that good? That depends on the | | | | for any credit card UK companies offer. If |
| source of your information. Some lenders | | | | you're looking for another credit card, your |
| would consider 50% credit usage to be | | | | first credit card, or a balance transfer |
| unacceptably high. For others, it's right in | | | | credit card to reduce the number of cards |
| their target zone. The most conservative | | | | that you carry make sure you thoroughly |
| lenders balk at a debt/credit ratio above | | | | research the options first of all. |
| 25-30% of your available credit. | | | | |