How Many Credit Cards Do I Need?

credit card has become a very common way for aCredit cards can help you build a positive credit history.
family to pay for the items it needs and wants.This can enhance your ability to receive a private
According to CardWeb.com, a firm that tracks thestudent loan, buy a car, rent an apartment, get a job,
credit industry, the typical American family of fourand buy a house.
carries about $8,100 in installment debt—most ofSecurity in emergencies; I’m sure you know all
it in credit cards. At 18% interest, that costs themabout Hurricane Katrina that hit New Orleans and
nearly $1,500 a year or $125 a month they can’tdevastated so many families. Most of them were
spend or save for anything else.caught unaware and those that could afford to, had to
How many credit cards do you currently have?scramble to find hotel accommodations for their
 Make a list of all of your bank cards, travelfamilies, food, and other necessities. In a disaster like
and entertainment cards, department store cards andthat one, having a credit card would be essential to
gas cards. Are you surprised at how many youprotecting your family and for your own survival.
actually have?Reduced need to carry cash or checks; If you are
 Now list beside each one, who issued therobbed or just lose your wallet, you can’t call
credit card.and cancel cash. A credit card or even a debit card
 Now list your credit limit next to each creditcan help you avoid carrying large amounts of cash,
card.especially when travelling.
 Now list your credit debt associated withEnhanced personal responsibility and independence.
each credit card.For young parents, college students, and others just
 Is your total debt more than 25% of yourgetting started, having credit cards can help you make
total credit line? If so, you are using your credit cardsends meet and gives you a sort of independence and
more than you should and getting more credit cards iseven prestige and respectability.
not the answer.However, only one national card like a "Visa" or a
 Now list the annual fees associated with"MasterCard" is necessary to receive these benefits. If
each credit card.the stores where you shop already accept the major
 Next, list the interest rate next to each creditcredit cards, you do not also need a credit card for
card.their store. This can lead to you spending more than
 Now, add up all of the annual fees for all ofyou can afford.
those credit cards.At , Jennifer Tarzian offers help in choosing credit
 Now, for each credit card, multiply the debtcards, how to reduce credit card debt, how to prevent
on that credit card by the amount of interest rate foridentity theft, what to do if your credit card is stolen,
that credit card. Then, total that up for all the creditand a lot more.
cards.She advises young parents to beware of too many
 Add that figure to the total amount of annualoffers you get via mail, email, and by phone. Credit
fees you are paying on all your credit cards.card issuers often tempt consumers into carrying
 That is the amount of money you are payingmore debt than their income justifies. Then, when the
out each year for the “privilege” of having allcustomer is drowning in debt -- stumbling to make
those credit cards.even the minimum payment -- they will pile on late
Jennifer Tarzian, of says one question that gets askedfees, jack up interest rates and begin what often
often is “What are the advantages to having creditbecomes a crescendo of collection calls. So be very
cards? We hear all about the disadvantages, but whatcareful.
are some reasons why I might want a credit card?