[mantra-button-color url=”#” color=”#47AFFF”][/mantra-button-color][mantra-pullquote align=”left|center|right” textalign=”left|center|right” width=”33%”]”Not too many people know that having too many credit cards can backfire in some ways. A recent survey found that on an average every US citizen has three active cards. Having three cards may work out for some but not for most. It all depends on how one manages one’s accounts.”[/mantra-pullquote]
Those who spend within limits can own as many cards as they wish. That’s because they can use their cards discretely, to obtain fringe benefits like mileage, rebates and improve their credit score, but for those who tend to overspend, having too many cards can be a bit risky. It is risky, because a card heavy wallet would always tempt them to splurge. As people who splurge rarely think before they act, they often end up biting more than what they can chew. Their credit report is exposed to risk. Given that it is difficult to re-build a credit history, it is advisable, in the first place, to, avoid risks of overspending. And the risks grow, when you have too many cards with you.
How to know whether your credit cards are harming you?
Open your annual credit report and look for credit cards you had forgotten about. As you are hardly aware of these cards, they could be stolen and miss used and you may have to bear the brunt.
If your credit card bills aren’t being paid on time then a sign of having too many cards than you can possibly handle. With too many credit cards one cannot focus to make timely credit card payments. Late or missed payment can severely affect your credit score. To know whether owning too many credit cards has causing you harm, you can look at the risk factors in your credit report. If one of the mentioned risk factor is “too many revolving accounts”, it’s a warning sign of sorts to ignore future card offers and, also, close some existing accounts.
Another easy way to find if your credit cards is harming you or not is by checking how much you get to save at the end of every month. If it is less compared to your earnings, it’s time for some introspection.
If you are having difficulty in getting loans, then check whether or not your credit card numbers have got anything to do with it. Institutions frown upon borrowers with more than four credit cards because they fear that after the approval, you could use all of your credit cards and that would affect your repayments. Those who have less number of cards and maintain a high credit score are the most favored ones for loans
Whether your cards are doing you any good or not, is something which you should take a call on. The early you act