The number of credit cards you carry in your wallet largely depends on your personal preferences, spending habits, and organizational tendencies. However, you see people carry several credit cards in their wallet. Why do you think that is?
Possibly, because they want to take advantage of the rewards and the sign-up bonuses that come with carrying several credit cards, but where do you draw the line. To help you decide, here are three different scenarios:
1. Carrying One Credit Card
Most people open only one credit card account, especially newcomers and people who are trying to correct their past financial mistakes. People with an established credit line may also opt to carrying one credit card in their wallet.
Even though carrying one credit card is an ideal scenario, you should apply for another credit card. Doing so will allow you to use your credit cards in a strategic manner, which will then allow you to save money. In addition to this, it will help you create a good credit card history.
2. Carrying Two Credit Cards
By carrying two credit cards, you can reap in the benefits of having two reward cards, one giving you cash back on all purchases and the other one associated with your favorite retail outlet. However, having two reward cards is only applicable if you have zero credit debt.
Conversely, people with debt or those with plans to incur debt down the line should opt for a 0 percent card for financing and a rewards card to use every day. If you apply for a third credit card, it will allow you to target your rewards cards to three of your biggest expenses, that is if you pay the entire sum, or you can even combine the rewards cards with a 0 percent card.
3. Carrying Three or More Credit Cards
People who carry three or more credit cards in their wallet should not apply to obtain more. Having three more cards allows you to use the cards strategically and in a way, that suits your financial needs. Additionally, it allows you to benefit from sign-up bonuses and 0 percent interest rates. The downside of having three or more cards places a lot of responsibility on your shoulders.
The probability of you facing financial shortcomings due to mismanagement may increase. The choice on whether one should carry one, two, three, or more credit cards depends on the individual. If you are thinking of closing your oldest account to open another, understand that doing so will lower your credit card score.
You need to carry at least two credit cards to diversify your portfolio. If you carry more than two, you risk finding yourself in a financial mess, especially if you tend to use them to make minor purchases. Plus, the responsibility of repaying the debt on so many credit cards also grows.
The Verdict: Carry two credit cards in your wallet, no less and no more than that!