Whether multiple credit cards will help you or land you in debt depends solely on how you manage them. If you have out-of-control credit card debt, having more than one credit card is a bad idea because available credit may be a temptation you cannot resist. On the other hand, if you are never tempted to use your credit card inappropriately, having multiple credit cards can offer some advantages.
At first glance, having $2,000 in available credit on a single card and using $1,800 of it while paying it off on time and in full every month makes perfect sense. From the perspective of your credit score, however, it is not an ideal situation. This approach takes your credit utilization ratio to 90 percent, potentially damaging your credit score.
To fix the problem, you need to lower your credit utilization ratio to around 30 percent. In this hypothetical situation, the only way you can do that is by either reducing your credit usage or expanding your credit limit through a new credit card.
If your monthly budget needs do not justify opening new credit lines, do not get new credit cards. The practice of acquiring new credit for the sole purpose of expanding your available credit limit may hurt your credit score, according to Investopedia.
Another reason why having multiple credit cards may make sense is that different credit cards provide different benefits. Some credit cards even have rotating benefits, so it may make sense to use them for gas purchases one month and groceries the next.
If you want to earn optimal cashback on most of your purchases, you will need a finely tuned selection of credit cards.
Make sure, however, that your bargain-hunting does not land you in trouble. Only use credit cards that you can pay off in full every month, on time. Keep close tabs on all your cards and make sure you do not lose any of them.
As a rule, do not keep credit cards that you do not plan to use for some purpose. Having credit cards that you cannot afford to pay off does not make financial sense.
Your spending habits, lifestyle, financial standing, and personal preferences should dictate the ideal number of credit cards you should have.
You do not have to dive into the rewards/savings game if it is too much of a burden for you. Choose a card with decent rewards on your most frequent purchases, with no annual fees, and a reasonable credit line if possible, and stick with it.
The downside of juggling multiple credit cards is that you may lose track of payments or let balances accrue and end up in debt.
Credit card debt can pile up quickly, and it may spiral out of your control before you know it. It is much easier to become indebted than it is to get out of debt.
Fortunately, even if you feel that your debt situation is hopeless, you likely have several options to deal with the situation. Contact a ClearOne Advantage Certified Debt Specialist at 888-481-1597 to learn what your credit card relief options are.
Some common debt relief options are:
Debt settlement can save you money while paying off your accounts. It is a debt relief option that shaves amounts off your principal, leaving you with less to pay off.
To make sure you deal with your credit card debt optimally, get a personalized debt relief plan today.
Topics: Credit Card Debt
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ClearOne Advantage, LLC is a debt settlement company, not a lender, loan broker, creditor, credit services organization, or debt collector. ClearOne Advantage, LLC does not assume or pay any debts; receive, hold or control funds belonging to consumers; or provide bankruptcy, legal, accounting or tax advice. You should review full program terms and conditions before enrolling. To the extent that any aspect of the debt settlement services relies on or results in the consumer’s failure to make timely payments to the consumer’s creditors or debt collectors, the use of the debt settlement services: (1) Will likely adversely affect the consumer’s creditworthiness; (2) May result in the consumer being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money the consumer owes due to the accrual of fees and interest by creditors or debt collectors. Not available in all states. Some third-party fees may apply. C.P.D. Reg. No. T.S. 12-03822.
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ClearOne Advantage is not a credit services organization and we do not make any claims regarding improvement of a consumer’s credit scores. Entering into a debt settlement program could adversely affect your credit score.
**Disclaimer - We do not charge upfront fees and you do NOT pay our fee until a settlement has been arranged, you approve the settlement, and at least one payment is made towards the settlement. As each situation is unique, fees and costs vary. Please contact us at 888-335-0896 for a free debt analysis and for complete program details.
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