Top 5 Reasons to Avoid Bankruptcy in Illinois and Opt for Debt Settlement Using Benveniste Law Offices
Unfortunately, for many people, it’s far too easy to fall into the trap of debt. Credit cards are the easiest means by which a person can end up owing considerable debt. Too often, those with heavy debt also have too many credit cards, so it’s important to determine how many credit cards are appropriate for the average person.
The Effects of Multiple Credit Cards on Your Credit Score
One of the biggest concerns of having multiple credit cards is a negative effect on a person’s credit score. Having more than one credit card can keep debt utilization ratios lower and credit scores higher; however, a high debt utilization ratio can hurt a credit score even if payments are made on time and in full. The key is to keep the balance on a credit card at 30 percent or lower than the total credit limit. In other words, if you have a credit card with a limit of $1,000, you should always aim to keep the balance at or below $300.
Additionally, signing up for multiple credit accounts in a short period of time can lower one’s credit score. Each time a person applies for a credit card, the credit card company runs a hard inquiry on his or her credit. Too many hard inquiries can negatively impact one’s credit score.
Different Cards Offer Different Benefits
Of course, there are some benefits to having a few different credit cards. A variety of cards can enable a person to earn the maximum rewards available with each purchase they make on each card. For instance, some credit cards offer five percent cash back on certain purchases, such as groceries, gas, or airline tickets. Some only offer a two percent cash back bonus on those same purchases, while some only offer one percent. The one percent cash back credit card is generally the default card for the holder when a greater reward is not available.
However, when someone has an array of credit cards, it’s important that he or she stay organized. Multiple accounts are difficult to maintain, and it’s easy to forget about a bill or misplace a card when one uses multiple cards to make everyday purchases.
A Backup Credit Card
It’s a good idea to have one backup credit card. There may be times when the credit card company notices or suspects suspicious activity on your account, like your card being used in a foreign country. In these situations, a backup credit card provides security while you work on securing your main account.
Emergency Credit Card
Having an emergency credit card is also ideal. In general, this card should include a high credit limit, no annual fees, and a low interest rate. This card should also be accepted by a majority of vendors.
Knock Out Multiple Credit Card Debt
Naturally, the more cards you have the more potential there is to accumulate debt. With the help of an attorney who handles debt settlement negotiations, you may be able to eliminate your debt burden at a reasonable cost. Heather Benveniste worked as a debt collection attorney for seven years and can put her experience to work when negotiating with the companies to whom you owe payment. Call Benveniste Law Offices at 1-800-497-5358 or contact us online for a free consultation.
About the author
