Category: Credit Cards

Credit Cards

How Many Credit Cards Should You Have?

Some people do not like having credit cards at all and there are other people who have loads of them. Most people have at least one card though, but it can be hard knowing how many you should have and it can really depend on how you use them.

If you are the type of person that would spend all the credit available on a card and then only repay the minimum balance then it would not be wise to have one. This is a very expensive way to use a credit card and will mean that you will end up paying a lot more money for the items than their ticket prices because of the interest charged by the credit card company. Although it can feel good being able to spend money and not pay it back, you will have to pay it back eventually. By the time you pay it back you may have forgotten what it was you spend it on or it may have worn out or got broken and so it will not feel much fun.

However, if you find a 0% interest card which you plan to pay back before the 0% interest period runs out then this is worth having. You can make lots of purchase on the card and you will not have to pay for them. Keep the money that you would have spent in a savings account earning interest and then when the zero interest period is up you can use the savings to pay for it. You have to have a lot of self-discipline to do this. It is also better to do it when savings account interest rates are higher because it means that you will make a lot more money from it and it makes it worthwhile trying. If you can get a lot of cards at 0% then you can keep taking advantage of this offer so it is well worth it. You will need to monitor them carefully though and make sure that you save enough money to pay off the full balance of each before the interest rate changes.

For some people a credit card will encourage them to spend more money. They will know that they have extra money available than is in their bank and so will be tempted to buy things that they would not normally be able to afford. This is not a good thing as when it comes time to pay off the credit card, there may not be the money to do so or it may be a struggle to manage that month.

However, credit cards can be really handy. They can be a great way to pay for things online as you can claim back a payment if you do not receive the item that you buy or it is faulty in some way and you do not get any luck trying to pursue this with the seller. For this reason it can also be a good way to buy more expensive items. It can also be a good alternative to carrying cash and help you out if you happen to be short of cash and not have access to a cash machine.

Some credit cards will give you cash back or rewards as well. You might get a percentage of what you have spent on the card back as a credit for the next month or you may accumulate points that you can use to buy things or air miles. There are many different cards out there that offer these sorts of things. These are really great if you can be completely sure that you will be able to pay back the outstanding balance each month and many people manage this successfully by budgeting their spending and having a direct debit set up to pay it off. However, the interest rates on these cards are higher than standard cards usually and so if you are likely to not pay off the full balance then it is wise to not use one. In fact it is best mot to have a card at all, but if you do want one then choose the one that has the lowest interest rate and will therefore be the cheapest for you to use.

However, you need to remember that if you do not pay a credit card back in full when the bill comes you will be charged interest (unless you have a zero interest card). This means that you will be paying more money for the items that you purchased with it. Pay back the balance in full and they are well worth having. However, delay payments and you could get yourself into financial trouble. Therefore you need to keep a very careful track on how much you spend with the card and make sure that you will be able to pay back the full amount when it becomes due.