Are you concerned with the dilemma of how many rewards credit cards should you have? Or, is it that you own one or two cards and are planning to own more?
In this modern world, credit cards have become a necessity among the middle and high class people. Many people can’t do without a credit card. Moreover, nowadays rewards credit cards are highly popular. To get extra points, airline miles, cash back, hotel stays, or other perks, more and more people are opting for rewards credit cards. Some own two of it, some have five, and some own even more than that. But how many rewards credit cards one should really have. Is there a definite number of cards that you should own? To simplify your confusion, we have jot down the answer to all your relevant queries.
No magic number of how many cards you should possess
In reality, there is no specific number of how many cards you should have. More credit cards can boost up your credit score, which in turn can help you save your insurance rates, get you more loans, and even get you a job. On the other hand, having multiple cards is quite risky and can land you in trouble. No matter what number of credit cards you possess, the important thing is how you utilize and manage them, and if you pay your bills on time or not.
To maintain a good credit score, you should always pay your card bills on time. Paying on time adds almost 35 percent to your FICO score. Another factor that affects your FICO score is your debt to credit limit. Credit to debit limit makes up to 30 percent of your credit score. If you hold your balances, then your one or two credit cards can also affect your Fico score and debt to credit limit ratio.
How many reward credit cards that you should possess also depends on your individual needs and preferences. If you spend most of your monthly expenses on groceries, then you can opt for one credit card for groceries. If you travel frequently then you can go for cards that offer free airline miles. If you spent a lot on shopping, then you can try the Walmart Discover Credit Card. If you want to earn rewards on your routine expenses, then you can choose a credit card that gives the facility of cash back and extra reward points. And, if you run a huge business, then you will prefer two separate cards, one for your business expenditure and another one for your personal expenditure.
No matter how many credit cards you have, it really depends on your own comfort level, and how you handle and manage them. In my opinion, you should have between 3 to 5 rewards credit cards. More than this can affect your FICO score negatively and less than this can have a negative impact on your debt to credit limit ratio.
It’s a good idea to possess a few rewards credit cards that suit your varied requirements. Even if one gets stolen or misplaced, then other cards can suffice for it. Also, own an American Express card, a MasterCard as well as a Visa card, so that you don’t have to worry about whether one would be accepted everywhere or not.