What is Right Number Of Credit Cards A Person Should Have
We feel up to 3 credit cards are sufficient to serve the needs for more people.
Some people manage with one credit card only if the credit limit suits their expense needs. However, in order to keep the credit utilization low, it is better to have 2 – 3 credit cards that you use moderately rather than charging everything on one credit card and maxing it out every month.
What to Do If you Already Have Multiple Credit Cards?
It was considered to be a bad sign if an unused credit account was closed by the creditor due to non-usage. Even though you have not utilize the credit on that account ever, just the fact that the creditor was shutting down your account affected your credit rating somewhat adversely.
This phenomena, however, is no longer true. People are opening and closing their credit card accounts more frequently than before as and when they get better terms of interest and repayment.
This is called credit surfing and has become part and parcel of the credit lending field, especially with the advent of competition amongst several credit service providers. There are however instances where multiple open accounts may be viewed by the creditor has a potential risk. They may feel hesitant to extend credit since you may already have a substantial amount available to you. It creates the potential of you utilizing your credit limit on various credit accounts and get yourself in a position where you are unable to pay back the loan. That said, multiple open credit cards usually do not have much of an impact on your credit report of your credit rating.
Balance to credit ratio also has a direct impact on your credit score.
Closing down these extra credit accounts will reduce the amount of credit available to you, increase your credit utilization and thus may adversely affect your credit rating.
The bottom line is that you should only open the lines of credit that you need.
This way the one problem that the creditor will not have before extending your line of credit is your higher risk of liability.
In case you have already open multiple credit accounts to not be in haste to close them. Closing extra unused credit accounts either may have no effect at all on your credit rating or may in fact adversely affect it.
In order to properly judge whether you should close extra credit accounts is to get an analyst is from any of the three credit bureaus of your credit report and your credit score. Most of them provide this service for a fee. Get your recent credit report along with your credit score and analysis is will help you determine if any particular account is having an adverse effect on your credit score.