Even in a sub-prime crisis, credit has never been more easily obtained than it is today. If you only have fair credit, credit card companies can flood your mailbox with
pre-approved credit card applications. You can also get credit card approvals almost instantly over the Internet. Before you know it, you could have five or more credit cards. So if your asking
yourself "How many credit cards do we need?", then the answer depends how much you spend and how much you can afford to pay off.
The more cards you have, it increases your risk to load up debt and may be damaging to your credit if you get over your head. This can cause banks to decline you for other types of loans, knowing that you already have immediate access to potentially a large amount of cash available on your credit cards. These may be some good reasons why it's a good idea for a individual not to have more than two or three credit cards.
Fewer cards will help you more easily and efficiently monitor the amount you spend and owe. If you find that you are in need of more credit, ask your credit card company to increase your credit limit before you accept another pre-approved credit card offer. You may want to also consider a personal loan or home equity loan if you are in need of more cash.
If you think you already have too many credit cards and plan to close some, debt advisers warn that you should not close too many cards at one time. This can cause your debt-to-credit ratio to fall. For example, if you have $15,000 in combined credit lines and a combined balance of $7,500, then you are using 50% of your available credit. If you close a credit card account with a $5000 limit and a $2500 balance, this will lower your combined available credit to $10,000, upping your ratio to 75%. This can hurt your credit score. It is recommended to keep your debt to credit ratio below 50%.
Credit can be a good resource for a individual to use because it can offer protection against fraud that checks and cash can't. However, it should be used wisely and not for the urge to just buy and spend because its available. The most important think to know when deciding on how many credit cards do we need is to ask yourself if you are responsible to keep up with the bills and can be in control of your credit.