News Feb 22, 2024 10:50 AM EST

New Data: How Many Credit Cards Should You Own?

By Isaiah McCall

Ever find yourself staring at your wallet, wondering how many credit cards is too many? Or maybe not enough?

In the ever-evolving world of finance, this question often pops up and let me tell you, it's a bit of a plastic jungle out there. So, how do we navigate it? Let's dive in.

(Photo : Getty Images) Credit Cards

The Magic Number - Does It Exist?

There's no magic number of credit cards that fits all. According to Experian, the average American has about four. However, credit bureaus suggest that five or more accounts - a mix of cards and loans - could be a reasonable number to build toward over time. But remember, it's not a race. What works for me may not work for you.

Let's take my friend, Jack for example. He's a travel junkie and swears by his three different travel reward cards. Then there's my cousin Lisa, who prefers sticking to her one reliable cash-back card. Different strokes for different folks, right?

The Factors to Consider

The key lies in managing your cards comfortably. Ask yourself, can you keep track of due dates, credit limits, and rewards programs? If you're nodding, great! If not, it might be time to rethink your plastic portfolio.

I remember when I got my first card - the freedom was exhilarating! But when the second and third ones came along, it became a juggling act. It took a late payment fee (or two) to realize that I needed to get organized. Now, I use a simple spreadsheet to keep track of everything, and it's been smooth sailing since.

The Pros and Cons

Having multiple credit cards can have its advantages4. You could maximize rewards, improve your credit utilization ratio, and have backup in case of emergencies. Jack, with his travel cards, racks up enough points to fund his trips around the world.

But remember, with great power comes great responsibility. More cards mean more chances to overspend and fall into debt. Trust me, I've been there. It's like being at an all-you-can-eat buffet with a bottomless stomach. Before you know it, you're stuffed with debt and the financial heartburn is real.

Personal Needs and Spending Habits

The number of credit cards you should have ultimately depends on your personal needs and spending habits5. For instance, if you're a frequent flyer, a travel rewards card might be beneficial. If you're a homebody who loves online shopping, a card with high cashback on internet purchases could be your best friend.

In my case, as someone who loves cooking, I found a card that gives me excellent cashback on groceries. It's like being rewarded for buying food - a win-win!

To Sum Up

So, how many credit cards should you own? The answer is as unique as you are. Whether it's one, four, or nine6, the right number is the one that you can manage responsibly while meeting your financial goals. It's about finding the balance between flexibility and control.

Remember, it's not about keeping up with the Joneses, but about understanding your financial landscape and making it work for you. So, go ahead, explore the plastic jungle, but tread wisely. Your financial health will thank you for it.

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