It is good to have 3 or 4 credit cards if you can manage multiple credit cards responsibly and can use all the cards to maximize your savings. The average person has about four credit cards, according to data from the credit bureau Experian, so it’s a reasonable number of cards to have. But if you are not responsible with the credit cards, it can lead to overspending, missed payments, and damage to your credit. Check below for some of the biggest pros and cons to having 3-4 credit cards.
Pros and Cons of Having 3 or 4 Credit Cards
Chance to build credit faster as there will be more information to report to bureaus
Creates hard inquiries into your credit, which negatively affects your score
Opportunity to take advantage of multiple attractive sign-up perks, such as 0% financing or initial bonuses
Increases the possibility of accidentally missing a payment
Access to more credit, which can help lower overall credit utilization
Increases potential to rack up unsustainable debt
Opportunity to minimize interest and maximize rewards with the Island Approach
Potential damage to your credit if all accounts are not kept in good standing
Whether or not it’s good to have 3 and 4 credit cards really depends on your credit standing and your organizational skills. If you need an ideal way to manage this many cards, try WalletHub’s Island Approach, where you use different credit cards to meet each one of your specific financial needs.
There is no golden rule about whether it is better to have more credit cards or fewer. In fact, there is no rule about how many cards you should have, or how many cards are too many. It really depends on your personal needs, as well as your credit standing and organizational skills.… read full answer
Using more than one credit card can help you save by allowing you to get the best terms for every transaction that you make. No single credit card offers the best rewards in every purchase category, plus the lowest rates and fees. But you can achieve that effect with a collection of cards that each excel in a particular area.
Use the Island Approach
One simple method to ensure you’re addressing all of your financial needs is to use the Island Approach. This means that you can use different credit cards to cover different needs.
For example, this might entail using a rewards credit card for everyday expenses that you can pay for in full by the end of the month and a 0% credit card to avoid finance charges on a big-ticket purchase.
Ultimately, you can use WalletHub’s CardAdvisor to get personalized credit card recommendations for your individual needs.
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