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Credit Cards: How Many is enough?

Jun 6, 2008
There is no right or wrong answer to how many credit cards you really need. Common sense dictates the fewer the better, that way you curb your appetite for credit. The problem is, common sense doesn't always reign supreme. How can it when this is the era of consumerism, of instant gratification? Some of us like to spend with complete abandon and there's nothing wrong with that. It can be argued that by spending, we fuel the economy.

Credit cards sustain this spending mode. But let's look at the facts:

Fact # 1: The average cardholder has 7 cards: three issued by their bank and four from stores or gas stations. (statistic from www.cardweb.com)

Fact # 2: 60% of U.S. households account for as much as 560 billion dollars in credit card debt. This breaks down to an average of $11,000 per household. (Testimony by Robert Manning to the U.S. Senate Judiciary Committee)

Fact # 3: Have you ever asked yourself why minimum payments are low? The answer is obvious. By asking consumers to make small minimum payments, they encourage the consumer to carry more debt. The lower the minimum payment, the larger the debt someone will owe. Who wins in the end?

Fact # 4:This fact comes from Jim at Blueprint For Financial Prosperity. Like cable and phone companies, credit card companies want to keep your business and will make concessions in order to retain you as a customer. If your interest payments are too high, call your credit card company - they will very often lower your interest rate.

Fact # 5: Students who carry a credit card debt of over $1,000.00 tend to drink and smoke more, take medication for depression and have lower grade averages in school. If you think we made this up, it was actually taken from some studies and none other than Secretary of the Commonwealth of Massachusetts, Franklin Galvin, said so.

Just some things to think about. Now how many credit cards do you think you need? We'd like to make it illegal to carry more than two cards, but realize we'd be run out of town on a rail were we to do so. Credit card spending is just too ingrained in our society.

Of course, no one can tell you how many credit cards you can or should have. Your financial planner or banker may scowl, but they can't make you give them up.

We suggest a deal - if you have more than two credit cards, why don't you take the extra (any more than two) cards and lock them up in a secure location. How about another proposition - Make more than the minimum payment each month. You want to eliminate your debt and this will speed things up.

Christmas is almost here. You're at liberty to use your credit cards in any matter you want. This is the time of the year where everyone uses credit cards without holding back or thinking twice since the holidays always put us in a cash crunch. But do yourself a little favor. For your New Year's resolution, how about making a promise not to use your credit card more than once a month? This is like imposing some kind of military-like discipline, but then again, everyone agrees that uncontrollable credit can be compared to a cobra with a poisonous venom.

A few more figures for you: Americans charge 1.8 trillion dollars annually (yes, that is trillion with a t). 11% of U.S. cardholders pay interest rates exceeding 25%! These figures come from the U.S. General Accounting Office.

Isn't it about time we looked at our credit card spending more closely and conducted a self-criticism analysis?

The best thing we could have is freedom from debt - and the statistics on debt carried by a lot of U.S. citizens bear this out. Don't let yourself become trapped by the cycle of credit card spending and debt - make getting out of debt your top priority this year.

So yes, it's okay to have more than two credit cards. Personally, we'd recommend only two, but that's not always a realistic recommendation. As long as you're coping well with payments and you can engage in disciplined spending, then by all means, you decide how many credit cards you want to keep. But keep them somewhere where you can't reach out for them when you're out shopping. Without the cards, salivate over a merchandise as long as it takes, then walk away, especially if you don't need it that badly.

Patience is a virtue - wait to make those non-essential purchases until you can make them with cash. Don't be too surprised if you don't even want them anymore by the time you can pay cash. Best of all, you'll be helping to keep yourself out of debt.
About the Author
Steven J. Talrechi has been reporting on credit and credit practices for over a decade. He specializes in helping others with second chance banking and obtaining a checking account when they have been turned down by banks.
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