Analysis

Here’s Why I’ll Never Have More Than 8 Credit Cards

Experian reports that the average American consumer has 3.9 active credit cards at their disposal, with older consumers and those with higher credit scores having more. For me, the absolute limit is eight. I refuse to apply for more. Here’s why.

Unnecessary stress

When my husband and I were in college, our credit cards became a problem. We needed them to stay in school but never seemed to manage to pay them off. That meant we carried balances from month to month, spending thousands of dollars in interest that we didn’t have. It was beyond stressful. However, the experience continues to inform our approach to debt.

In short, we don’t carry revolving debt. If something is charged to a credit card, it’s paid off that month. If we can’t afford to pay it off before interest begins to accrue, we don’t use a credit card. Honestly, the stress is too overwhelming for us to ever willingly get back into credit card debt.

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I want to know how much we owe on a credit card at any given moment, and I want to know that our cards will be paid in full and on time. I’m convinced that each of us has a “magic number” for credit cards. For me, the number is eight. I cannot babysit more than eight cards at once.

By the way, if you find yourself in credit card debt, this is a good time for me to tell you that it’s possible to get out. It takes time and effort, but you’ll get there. Debt feels heavy but doesn’t last forever — not if you’re willing to get rid of it.

Time

Given the amount of time I spend dealing with credit cards (even those we rarely use), I cannot think of a sensible reason for taking on more. Here are two credit card–related tasks I regularly perform.

Checking balances

We use only two cards regularly: the Southwest Rapid Rewards® Plus Credit Card and the The Platinum Card® from American Express. The travel reward points we’ve collected through the years have come in handy.

Still, I regularly check the balances on all eight cards to ensure no charges have been posted. I’m concerned that an occasional charge will appear, like a highway toll pass or membership renewal. Although I spend less than 10 minutes checking balances, it’s something that needs to be done about every four weeks.

Using the cards

Did you know that your credit card company has the right to cancel your account without notifying you? While the Credit Card Act of 2009 requires creditors to provide customers with 45 days’ notice in the event of major changes to their accounts, this rule does not apply to cancellation due to inactivity. If you don’t use a card for a while, the creditor can close it, and you won’t know until you attempt to make a purchase with the card.

How long a card must be inactive before an account is closed varies by credit card company. So, I pull out all eight cards twice yearly and use each to buy something small. Then I wait a day or two for the charge to post and go back in and pay it off. I’d rather spend time using and paying the card off than reduce our total amount of available credit and increase our credit utilization ratio.

Need

We don’t need more than eight credit cards. Considering that they’re paid off each month, the credit available to us is more than enough. Until writing this article, no one other than my husband and I knew how many credit cards we had, and no one cared. It’s not as though having a wallet full of credit cards is a sign of financial success. In fact, for too many people, it’s just the opposite. Credit cards represent an easy way to spend more than necessary and potentially get bogged down in debt.

Each of us decides whether we want credit cards and, if so, how many we’re willing to take on. Your number may be different from mine, and that’s great. The idea is to choose a number that works best for you — even if that number is zero.

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