Too Many Credit Cards?
Monday, April 9th, 2007Credit cards have definitely changed over the past few decades and the way we use them has changed as well. Long gone are the days when you opened a bank account and signed up for the default credit card offered to you by your bank having that the only card decorating you wallet.
As credit card spending increased over the years, so has the marketing done by credit card issuers to a point where a credit card is no less a consumer product than the products purchased by them. It’s almost impossible to find anyone with just one card in their wallet anymore and many of us carry as much as 10 different card, each offering discounts and benefits on different purchases, categories or stores.
However, when does it become too much? Many cards charge monthly or yearly service fees (especially if the card is unused beyond a certain minimum) and these fees add up quickly. As a general rule we recommend only keeping a card you have a specific reason for using at least twice a month (perhaps for a discount at a certain store), in most cases if you find you use the card less or don’t benefit from using it you are better off canceling. Of course if you calculate your savings overvalues the service fees even with fewer uses, you should definitely hold on to the card.
Another thing you should consider when holding many cards is proper management of your monthly payments. For cards you use infrequently you may find you forget to send a check and are charged a penalty (which can sometimes be higher that your original bill). Try to use direct account charges as often as possible to prevent these situations.
Have you gone over your cards lately?
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