Remember the golden rule: credit isn't cash! Use your cards responsibly, and only spend what you can afford to pay off by the next due date. If you cannot, simply delay your purchases or start saving for them in advance.
When you use your credit card, you know that your credit card company gives you a few days of interest-free grace. If you pay off your balances during this period, you won't be paying any interest charges, while also having the ability to rotate your cash for a few days.
This way, you should always have at least one card that you can use. Because of possibilities like these, it's a good idea to have at least two or three credit cards. If you only want to have a single credit card, make sure that you're always prepared with a backup payment method, whether cash or a debit card.
However, here a couple facts that might help you on your way to working out how many cards you should have: The average number of credit cards held per person in the UK is 1.7.
"Too many" credit cards for someone else might not be too many for you. There is no specific number of credit cards considered right for all consumers. Everyone's credit history is different. Lenders tolerate different levels of risk, and different credit scoring formulas have different criteria.
For example, if you have a $500 credit limit and spend $50 in a month, your utilization will be 10%. Your goal should be to never exceed 30% of your credit limit. Ideally, you should be even lower than 30%, because the lower your utilization rate, the better your score will be.
Unless your balance is always zero, your credit report will probably show balance higher than what you're currently carrying. Fortunately, carrying a balance won't hurt your credit score as long as the balance you do have isn't too high (above 30 percent of the credit limit).
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Although it goes against general credit advice, in certain circumstances closing a credit card account is necessary. A credit card can be canceled without harming your credit score—paying off your balances first is key. Closing a credit card will not impact your credit history, which factors into your score.
The standard advice is to keep unused accounts with zero balances open. The reason is that closing the accounts reduces your available credit, which makes it appear that your utilization rate, or balance-to-limit ratio, has suddenly increased.
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