How Many Credit Cards Should You Carry?

Credit cards often offer several benefits such as free warranty extensions on purchases and free insurance schemes. But credit cards can also create havoc on your budget – the many stories of overspending and late fees can attest to that. The final truth, however, is that credit cards come with advantages, as well as disadvantages. As long as you can manage to have several different cards and don't miss payments, they're easy to handle with no dire consequences.

But what is the optimal number of credit cards to carry? Should you keep a separate credit card for travel miles offered by airlines, a separate one for early access to tickets, and yet another one for special discounts on regular grocery runs? Various sources on the internet seem to have conflicting opinions on this question. According to experts, however, you should carry at least two credit cards, ideally from different networks (Visa, Mastercard and so on). For instance, owning three cards, but all of them being Mastercards might present a problem if you run into a vendor who only accepts Visa cards. In addition, if you plan on carrying only two credit cards, it is better to make sure that both offer different kinds of rewards (cash back, miles etc.) so that you can maximise on the perks offered by credit card companies. You can always exceed the minimum threshold for two cards – the number then depends on your lifestyle and circumstances. Consumers who are categorised as ‘high achievers' by credit card companies own approximately seven cards. An average Indian, on the other hand, owns around 2.2 credit cards. A total of “36.24 million credit cards” are currently in operation in the country. However, according to RBI reports “the debt of an average Indian is also increasing – amounting to an outstanding sum of around Rs. 42,100 crores".

For people who are complete rookies at credit cards, experts suggest obtaining just one card in the beginning and observing your spending and payment trends. If you can consume wisely and make your payments on time, clearing the bill every month or so, then you can move on to one more card and think about enjoying benefits provided by credit card companies. While opening another credit card, it is important to avoid card companies that don’t offer rewards that you might use in your daily life – for instance, cash back on regular grocery shopping is a perk several consumers enjoy. Your second credit card requires thinking about what rewards might benefit you the most – though these requirements might change over time. Some cards don’t require an annual fee to obtain – these are also the kind of cards that provide lower bonuses. The trade-off then depends on you – are you willing to pay an annual fee for a credit card and enjoy rewards?

If you have applied for a credit around the same time as applying for a loan, chances are, your loan application might get rejected. Six months post the date of applying for the loan is considered safe to apply for a credit card. Even then, you should ensure that all debts and bills are paid off. The loan process often involves strict checking of previous loans you’ve applied for and whether you paid them off in time. They also ensure that you have no late bills piled up from credit cards or so. Again, if you are already in debt, and have a mountain of bills to pay off, it’d be best to avoid credit cards.

So the number of cards you own should depend on the way you spend. It is more important to ensure that your cards give you access to more than one network and offer the best possible rewards suited to you. You also need to make sure that you aren’t handling so many credit cards that you can’t keep track of all the payments you’re supposed to make. Owning twenty cards doesn’t make you a responsible credit card user if you forget the due dates for half of those. The whole point of having many cards is to earn points during regular transactions that you can avail as cash back when you’re paying off your dues.

There is no perfect number, generally speaking. While some people despise being in debt and carry at most one credit card, there are also people who carry twenty to thirty cards and check their balances a few times every week to make sure they remain on top of their finances. However many cards you own, most credit experts agree that the best thing to do is to keep your overall credit card usage low, and also secure access to more than one credit card network. If you plan on traveling abroad any time soon, it makes sense to secure access to cards from several networks to keep you covered in case of emergencies.


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