What is the Maximum Number of Credit Cards One Can Own?
Well, technically speaking there is no hard and fast rule about the number of credit cards one can have. The number of cards solely depends on the number of cards you can afford and the way you manage your debt. In the UK, on average there are just one or two cards per cardholder. If you have many cards then it may have a negative impact on your credit history as it suggests that you are always in spree of borrowing money. If you do not have any credit history then it hints that you are not borrowing money and so, the credit card provider loses interest in you.
Number of cards depends on one’s financial management of the debt and the ability to meet the repayments. Also, people buy cards due to a variety of requirements but the best practice is to use one credit card over the years and manage the debt well. This also improves one’s credit score and creates a good image to the credit provider. So, normally one card is enough except you may have some special circumstances which demand a new card, such as a balance transfer card.
Shall I apply for another card?
Yes! You can but check the need first. Accumulating credit cards will not do any good to you. In fact, it may hamper your credit score. Still if you want one then:
Do risk benefit analysis of the card you plan to apply for
Check whether you will be able to manage another monthly payment along with your existing card.
How much debt do you already have? Is it necessary to add a new debt?
Are you sure of using the new card? If not then keep in mind that unused cards create a really bad credit report
Which type of credit card should one buy?
Credit cards offer different kinds of services. Based on your need you can select the one that suits you the most. The following types of credit cards are available in the UK:
0% purchase cards – These allow you to make purchases without paying interest for a period of 3 months to 2 years
Balance transfer cards – You can transfer the balance of existing card into this new card and spread the balance amount over the interest free period
Money transfer cards – To transfer the balance from the credit card to your bank account. From the bank account you can make cash withdrawals without extra charges
Rewards and Cashback cards – Every time you make a purchase, you get some percentage of cash back or as a reward in the form of discount or voucher. However, these cards are suitable for people who are good with paying balances in full each month.
Low APR credit cards – Best when you want just one card and use it consistently for a long time. You will be charged with a lower APR between 6% and 12% and the interest may not increasing sporadically.
Bad credit cards – These are to improve your credit ratings as they give you a smaller credit limit and charge higher interest
Based on your need, you can select any of the different types of cards. The only thing should be to maintain the finances. Nonetheless, shopping for cards frequently may leave a bad image that suggests you are always looking to borrow money. So, no need to get fascinated with more number of cards. The idea is to keep the number of cards and balance small. All the Best!
Shop around on freepricecompare.com for the different types of cards and choose the best one for you. For more details, feel free to call us on 02034757476.