ArticleSubject.com » Finance » Credit » Credit Cards: How Many is enough?

Credit Cards: How Many is enough?

by: StevenJ.Talrechi
Total views: 5
Word Count: 866

How many credit cards do you need? There is no one correct answer to this question. However, as few as possible is really the best advice - it is easy to go overboard with credit and common sense tells you to keep spending on credit under control. You know as well as I do that common sense isn't always what dictates the decisions people make though. There is a culture of instant gratification in this country - and while there is nothing inherently wrong with spending, there is with letting credit cards spending get out of control.

Credit cards are the one of the primary enablers of compulsive spending. Let's have a look at some of the facts here:

Fact # 1: Each cardholder owns an average of 7 credit cards: three bank credit cards and four store or gas cards (John Gibbons of ABC News online, citing a 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: Lead blogger Jim at Blueprint For Financial Prosperity gives us this useful fact. Credit card companies, just like the phone company or cable company, want to keep you from going over to their competition. If you contact them about interest payments which you think are too high, they will almost certainly work with you. Call them; you'd be surprised what you can get them to do for you.

Fact # 5: Students who are carrying significant credit card debt (over $1,000) are more likely to be medicated for depression than their debt-free peers and also have much higher rates of alcohol and tobacco use. These figures come from studies cited by Franklin Galvin, Secretary of the Commonwealth of Massachusetts.

Just keep these facts in mind as you read on. Getting back to the question of how many credit cards you need, what is this magic number? As for us, we'd like to outlaw carrying more than two! Of course, this idea would never fly in our country.

The point is, it's really no one's business how many credit cards you have. It may make your financial planner frown or your banker wince, but no one can tell you to cut up your excess credit cards.

If we may propose something - If you've got more than two cards, why not lock up the excess cards in a secure place to keep temptation at bay? Another idea - When your statement comes each month, make a payment larger than the minimum. After all, the idea is to get out of debt and this will make things happen faster.

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.

Did you know, for example, that US consumers charge $1.8 trillion to their cards each year? Did you also know that 11% of cardholders pay interest rates of over 25% a year? That was what the Consumers Union of San Francisco learned from the US General Accounting Office.

It's time for all of us to take a hard look at the way we use credit cards. Perhaps this can lead to some changes in the way we spend.

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.

While we would advise having no more than two credit cards, we know that this is simply not going to happen for many. If you can control your spending and keep a grip on your payments, then you can have as many cards as you would like. However, try not to take your cards shopping with you - if you can't just pull out that card and buy anything anytime, you'll be keeping yourself out of a lot of trouble. You probably don't need it that bad anyway.

Patience is a sublime virtue. Why not wait until you have the cash to pay for it? For all you know, you just might decide that it was merely a whim - certainly something you can get by without!

Click here to join VC Affiliates - Fantastic revenue share, CPA and Hybrid Structures available!

About the Author

Steven J. Talrechi has been studying credit and credit practices for 12 years. He is an expert in assiting others with second chance banking and obtaining a checking account when they have been turned down by banks.  

More Articles from: Credit