Knowing How Many Credit Cards You Can Handle

In today’s consumer world, credit cards have become commonplace as one of the most used methods of financing one’s purchases – from daily needs such as groceries and gas, to major purchases such as appliances and home renovations. Even in sour economic times, the average person has credit cards being offered to them in stores, banks, gas stations and even by mail. Knowing how many credit cards you can handle is important in ensuring that you don’t exceed your ability to pay off your credit cards and become financially insolvent.

When first considering a new credit card, it’s very important to look at the “fine print” details before signing and committing to using and receiving the card. A credit card application is a contract, and even if you never use the credit card after you receive it, you may still be obligated to pay annual credit card fees. Some individuals with multiple credit cards have been surprised to see that their credit card fees total hundreds of dollars per year, which can be a significant part of a family’s budget. Also, it’s important to check the credit card agreement to see what interest and payment obligations you’ll be under with the card. Some cards may start at a lower interest rate, but then rise if a payment is missed. Other credit cards will require minimum monthly payments be made to keep the card active.

The actual number of credit cards one can handle comes down to their spending discipline and their household income. A family that is bringing in hundreds of thousands of dollars a year can obviously support more credit cards than one that is living on the poverty line. Individuals that are financially disciplined can easily support multiple credit cards by ensuring that the spending on the cards is only kept to what they can afford, and the cards are paid off in full every month. Credit card interest, especially on cards offered by retail stores, can become a burden very quickly, so it’s important to stay on top of payments to ensure that interest doesn’t quickly overwhelm your budget. Credit card fees are generally paid annually, so budgeting for when those fees arrive is also good fiscal prudence.

For most individuals and families, it’s less about how many credit cards you can handle and more about how many credit cards you need. It’s rare that more than one or two cards per household are necessary, so learning to say “no” when handed a credit card application in a store will be a very useful skill. Research and determine the best cards for your financial matters, ensure they’re paid off on time, and you’ll do well.