Before reading this article, just peep into your wallet. How many credit cards is it carrying? This question must get a deep thought. The 21st century is becoming the plastic age. Carrying money in wallets is an old thing now. It is the time of Credit Cards. One swipe and you will get your bills paid. Banks and NBFCs are also tempting customers by rolling out attractive Credit Cards in association with the companies. You can easily choose a credit card that suits your lifestyle. The financial institutions have made the process of availing a Credit Card very easy with minimum documentation. There are different cards offered by banks like Platinum Credit Card, Frequently Flyer Cards, Dining out Credit Cards, Student Credit Cards, etc. But, how many credit cards should you have? What is the effect of a Credit Card on your Credit Score?
Too Many Cards – Too many spending options
If you have too many cards, it means you have many options to spend the money. You face many deals that may tempt you to swipe your card to earn reward points or gift vouchers. By doing so, you end up spending money in a wish of earning rewards. Too many credit cards are like too many outlets for money.
Also Read: Which Credit Card matches your lifestyle?
How to choose the number of cards?
You can manage your expenses better than anyone else because you understand your budget and requirements better than anyone else. So, think with calm mind about your requirements and expenses. Take out your all cards, sit with yourself and give a ranking to each card on the basis of your needs. Separate the cards that you have bought only to earn some points or gifts. Plan your expenses with the card limit and don’t forget to add some emergency expenses. It will help you to decide the number of cards you should have.
Choose the best one smartly
Choose the card that is best suited to your style. Consider all points like interest rates, credit limit, reward point schemes, annual fees on the card, etc. Select the cards that can satisfy your expenses and provide you financial stability. Discard other cards and give a lighter feel to your wallet.
How does a Credit Card affect your CIBIL Score?
CIBIL Score is an important aspect in anyone’s credit report. It can decide your fate when you apply for a loan. For the approval of your loan application, you must have a CIBIL Score greater than 700. A credit card makes your credit history. You should pay your bills timely and should not default in any case. It will make your CIBIL Score strong. If you have a credit card, you should not exceed more than 30% credit utilization ratio. Utilize the credit limit carefully. It will build your credit score and make your financial history disciplined. If you have many cards, you need to do tracking of each card. You should pay timely for each card. Tracking and maintaining fewer cards is easy rather than getting confused with a large number of cards.
What is the Magical Number that you should have?
Now, this decision is all yours. You should decide the number by considering all the points. According to experts, the number of cards should be in between 3 and 5. The perfect number is 3. You can use 2 credit cards to meet your needs and 1 card for emergency financial crunches. You can also track and manage 3 credit cards easily. One thing that you must not forget is to set a 30% spending limit.
So, use your credit cards wisely. Use the plastic money to cherish the life, not to get into any dilemma. Your wallet also has a right to look good and lighter. So make your wallet lighter by availing a magic number of cards.