Most Americans have between 5 and 10 credit cards. Some even carry up to 50. But how many is too many? The important thing to understand is that it is not the amount of credit cards you have, but instead how much you spend and how much you can afford to pay off each month.

Be aware that the more credit cards you have, the bigger risk you pose to yourself to create debt and hurt your credit scores. Also, each time you open a “store credit card”, approximately 20 points are taken off of your credit score, according to Consumer Credit Organizations. Typically this is because store credit cards are available to anyone – even those consumers who otherwise would have trouble obtaining credit.

Here are some tips to keep in mind:

Keep your balance-to-limit ratio low. Your credit card balance should be ideally kept to 30% of your limit or less. Utilization of over 50% of your credit limits can harm your credit scores.

Make your payments on time. Keep your credit cards current. New late payments can decrease your credit scores substantially.

Do not close too many credit cards at once.  When you close several credit cards at once, your debt to available credit ratio will fall.

Unfortunately most credit card users have not been educated on the right way to use credit cards and end up in a mountain of debt before they realize the damage this has done to their overall financial picture. There is no magic number or limit to the amount of credit cards you have, just be wise when applying for credit and using the credit that you have.

After assisting my clients with starting their Debt Melt-Down program I will typically recommend that 2-3 cards are kept open with $0 balances for 2 reasons.  1) It is important to have revolving credit as part of any good credit mix in order to keep your scores strong.  2) Credit cards can sometimes be a saving grace in situations like job loss, death in the family, or medical emergency where temporary access to funds can be essential.  Having access to credit and not using it does not cost anything (as long as there is no annual fee for the card).

If you are a homeowner who is not paying off your credit cards in full each month and owe a total of over $5,000, you need to look at options to help pay down your debt in an accelerated fashion. You can call my office at 1-888-456-5635 for a FREE Debt Melt Down analysis.

Your friend,

Robert Weinberg