Credit cards are a necessary evil of our current society, but when people get to a point where they are stuck with a lot of credit cards and not a lot of cash in the bank, it can become tempting to start asking how many credit cards is too many? As you may be aware, many major credit card companies are reporting record high default rates among cardholders. Unfortunately, the companies have no problem with charging these high rates because they are making money on the interest paid on credit card debt. There are ways that people can pay off their credit card debt without falling into this trap.
First of all, understand the difference between a “soft” and “hard” credit card. A soft card allows you to make purchases with a specific dollar amount but will result in a less than twenty-five percent interest rate. On the other hand, a hard card is similar to a debit card, except that you are required to have a balance above the specified credit card limit. This means that you will pay more interest over time and that your monthly payment amount will increase.
The most important thing to remember is that you should never have a limit on credit cards. If you carry a balance on a credit card, it's best to pay it off as soon as possible. Too many people have problems paying off card balances because they force themselves to try to pay off their balances by the end of the month. Never, ever try to pay off your card in this way. Instead, make sure you have the money each month to pay off the balance before you go on a shopping excursion. You also want to avoid using more than one credit card.
To figure out how many credit card is too many, it's important to remember the ratio between your card limits and your actual spending. Many card users tend to use their cards like credit cards, in that they carry a small balance that is paid off each month. They don't realize how many purchases they make with their cards each month and so they are never able to pay their entire balance off at any given time. They tend to charge things that they do not necessarily need, and this leaves them with a bill that is often more than their monthly income. When they find themselves in this position, it's easy to get into trouble.
You will be much better off if you stick with a method of card management in which you pay your card balances only when you can afford them. For those who use their credit cards on an almost daily basis, this could mean paying off the card balance once a month. Some credit card debt experts even recommend that credit card users pay off their card balances in full every month. Remember that you need to learn how to manage your debt in order to avoid accumulating any more debt, so be careful not to use your credit cards as though they were free money.
You will find that there are many credit card debt consolidation services available to help you manage your card debt. If you are willing to look at the entire situation and determine whether or not it's in your best interest to consolidate your credit card debt, then these services can be very useful. These companies will help you organize your payments into one monthly payment, which makes it easier for you to make payments. Look for a company that will work closely with you to get you a better interest rate and lower monthly payments.