It's a well known fact that credit card companies will give anyone a credit card. In fact companies are looking to give cards to people who "otherwise can't get credit," says Steve Rhode, president of Myvesta, in a Bankrate.com report. But does that mean Americans should have as many as possible?
Some credit card experts will say that there is no set amount of cards that you should or should not have. It all depends on your ability to spend money and pay off the balances. But be warned: The more credit cards you have, the better your chance of incurring more debt and destroying your credit.
Anyone can be tempted to get a credit card at their favorite clothing store if it gives them 10 percent off their purchase. However, that's the best time to turn it down. Having these additional cards will only add to your credit card balance, unless you plan to
pay them off immediately.
Unless you can pay off your Banana Republic, Gap, Express and Home Depot card at the same time, you should only have one or two cards.
In case of emergency
Many people use multiple credit cards as a savings vehicle. Or, they keep them on hand to pay for emergencies. However, if a payment is missed on any of the credit cards, then the late fees might be insurmountable. If this sounds familiar, then its time to reconsider how many cards are actually needed for emergencies.
Steve Bucci, a debt advisor for Bankrate.com, proposes that you have at least two to six credit cards - and no more. The cards should be Visa, MasterCard, American Express or Discover. Most merchants will take most of those cards. And you should pay them off on time and regularly to maintain a low interest rate. This will ensure that cardholders will have the funds for real emergencies.