Credit cards: how many are too many?

[asmom]

I've been on something of a tear lately applying for credit cards for the various awards. It's been fun, I've earned approximately $150 dollars, 4 free hotel nights and 1 round trip airline ticket. But now I'm starting to get a little nervous about having so many cards: I'm up to 7. Only one has a balance which I am actively paying off, but does having so many open lines of credit negatively affect my credit score?

[asmom]

Oh never mind, I just saw a topic below that answers my question!

[brianpalmer]

do you pay these cards balance in full each month?

things vary depending on which kind of credit card you own.

cheers!

[bjl584]

Having too many cards can possible hurt your score. I think that everytime that you open a new one your score will go down a bit since the card company is running a credit history report on you. I used to have like 7 or 8 cards, but I decided that was too many. I cut them all up except for 1. That's the only card that I need. I hardly ever use it excapt when I travel for work, so it works out fine for me.

[Ima saver]

Iusually carry two in case one does not work.

[debtdude]

I've seen this topic come up on a regular basis. Questions to ask yourself...
1.) Why would I want X-number of different credit cards? (perks, rebates, need all the credit I can get because I have no money.)
2.) If I had just one more credit card, would I be likely to use it and pay it off at the end of the month?

Credit cards are very tempting to use. The more you have, the more tempting to use them.

As it related to your credit score, I think the forum concensus was that too many aren't bad for your credit rating, it's more about the line of credit and your ability to pay on time.

[Jacklad]

Originally Posted by bjl584

Having too many cards can possible hurt your score. I think that everytime that you open a new one your score will go down a bit since the card company is running a credit history report on you. I used to have like 7 or 8 cards, but I decided that was too many. I cut them all up except for 1. That's the only card that I need. I hardly ever use it excapt when I travel for work, so it works out fine for me.

When you first apply, you will be hit with a small decrease in your score, but that usually gets made up relatively quickly.

OTOH, closing an account will not increase your score at all. It may, in fact, lower your score more if you have outstanding balances (as your utilization percentage will rise as credit capacity is lost).

If you can't trust yourself to use them responsibly, cut them, freeze them in a block of ice, give them to your mother, lock them in your safety deposit box - anything that will prevent you from casually accessing or using them. But don't formally close them unless they have annual fees that you want to avoid.

Jackie

[Jacklad]

Originally Posted by debtdude

As it related to your credit score, I think the forum concensus was that too many aren't bad for your credit rating, it's more about the line of credit and your ability to pay on time.

Exactly.

Jackie

[Ima saver]

I probably have 12 that I have gotten over the years. I keep all but two of them in a lock box. I only use one, and pay it off every month.

[jmjj215]

Also when applying for a mortgage the bank will often look at the credit you have available, not only what you're utilizing, to see if there's any risk there.

[SOAPPRO]

How many credit cards are too many? my answer is 1

[bjl584]

Is it better to just let a card expire on its own from inactivity than it is to cancel it? Which effects your credit score more if at all?

[vsjhoc]

Originally Posted by bjl584

Is it better to just let a card expire on its own from inactivity than it is to cancel it? Which effects your credit score more if at all?

The card expires, but the account doesn't expire. As other posters said, don't cancel the account.

Also beware there is a distinction between how applying for a lot of cards affects your score verses having a lot of open accounts. Every "inquiry" that is generated when you apply for credit stays with you for 2 years. Having more than a couple of inquiries deflates your score. Statistics say that people with 6 or more inquiries are 8 times more likely to file for bankruptcy than people with zero inquiries. So don't apply for credit you don't need.

[rob62521]

We are friends with a couple who apply for every card they get an offer sent to them. At last count they had 41 credit cards. I don't know if they pay them off, but just keeping track of that many credit cards sounds ridiculous.

[asmom]

Originally Posted by debtdude

I've seen this topic come up on a regular basis. Questions to ask yourself...
1.) Why would I want X-number of different credit cards? (perks, rebates, need all the credit I can get because I have no money.)
2.) If I had just one more credit card, would I be likely to use it and pay it off at the end of the month?

Credit cards are very tempting to use. The more you have, the more tempting to use them.

As it related to your credit score, I think the forum concensus was that too many aren't bad for your credit rating, it's more about the line of credit and your ability to pay on time.

That's interesting advice. I was afraid that just having too many would look bad, balance or not. Thanks....

[glock35ipsc]

I was behind a guy in KFC the other day that had a wallet like George's in that "Seinfeld" episode. I kid you not, there was a stack of plastic in there that was no thinner than 1.5"!!!!!!!!!!!! That, my friends, is too many for me!

[T_I_N_A20]

I only have one that's cosigned by my father. I rarely use it... I think 2 is enought... One that I'll sign up when I turned 18 and the other one that my father cosigned it, I'll probably keep it for emergency ? I don't... Just have to wait next year to see then.