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: 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: Minimum payments tend to be very low – here’s why: when the cardholders make only very small payments, they carry more outstanding debt (and thus more interest payments). As you may recall from high school Latin: Cui Bono? – Who benefits from this?

Fact # 4: Here’s one from Jim who’s the principal blogger for a company called Blueprint for Financial Prosperity: you can actually lower the interest rate on your credit card by simply picking up the phone and asking for it. Jim says, credit card companies are like cell phone and cable companies, they’re afraid you’ll leave and join with one of their competitors. So, use this fact to your advantage and call your credit card company today if you’re paying an arm and a leg on just the interest rate.

Fact # 5: There is a link between debt and depression. Studies (cited by Franklin Galvin, Secretary of the Commonwealth of Massachusetts) have shown that students who have over $1,000 in credit card debt have higher rates of drinking, smoking and are far more likely to be medicated for depression.

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.

So let’s compromise. If you have more than two to, say, five – why not leave three in a locked drawer and use only two if you really need to. Let’s compromise further: when you receive your statements, how about making more than the minimum payment? Your aim should be to drastically reduce your debt.

The holidays will be here before you known it. You will no doubt overspend using your credit cards. At this tie of year, everyone does. How about this though – after the holidays (we realize it may be impossible to keep from overusing credit during this season) you make a New Year’s resolution: promise yourself that you won’t use your credit card more than once per month? This is a bit like going on a strict diet, but you can and must do this if you want to get a handle on credit card debt.

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 is high time that Americans examined the way that they use credit cards and decided to be honest with themselves.

Judging from the debt load of many Americans, the best freedom we can have is freedom from debt. Imagine living day-to-day on credit and barely able to make those hefty monthly payments. If you had zero debt, that’s certainly something to be proud of! Why not have zero debt as your # 1 priority for 2008?

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 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!

Popularity: 32% [?]

(No Ratings Yet)

 Loading ...

 |  Email It  |  Print It  |  Subscribe to It!
This entry was posted on Friday, July 18th, 2008 at 1:10 am and is filed under Debt Consolidation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.