I read in articles that the average american owns 4 or 8 or 9 or 10 credit cards and I was wondering whats the purpose of owning so many? Why get 10 credit cards rather than just a single card with a high limit?
I get that some cards have different bonuses and interest rates and the like and I can imagine how 2 or 3 would be beneficial but 10 seems kind of ridiculous. Is there something obvious I’m missing?
People don’t know how to manage money? They’re kiting credit card debt with rotating balance transfers? They have a perverted sense of financial self-esteem where more credit cards is somehow linked in their head with financial status? By all indications the average American is a financial ignoramus of jaw-dropping proportions, with their ignorance on that subject only eclipsed by the fraternal twin demons of math and science.
There of course are exceptions, such as having an AMEX/Discover card in addition to an MC/Visa, since some merchants only take one or the other. And some people may like the special rewards certain cards give them, nothing wrong with that. But that doesn’t excuse folks who have quite honestly 10, 20, or more MasterCards.
I always keep a second card active in case the first one gets lost or stolen, and I need something else to fall back on. When I travel, one is in my wallet, and the second is in the suitcase somewhere.
Having more cards than that is, I agree, senseless. It’s just a path to financial trouble.
We have two main cards- my husband uses one only for business travel to make it easy to submit receipts. The other is for family use. At one point we had more, when we first married, as we each had a couple of cards from before we married and needed to eliminate a few after.
It’s possible this supposed "fact’ is deliberately misleading. Perhaps debit cards count as a credit card, despite that they only draw money from an active account, not from a line of credit.
Same with cards for specific stores. Best Buy comes to mind, as does Sears and such.
Just an idea.
I have had up to 4: One MC/Visa, one Amex, a business Amex for my company and a MC/Visa issued by my European bank so that I can buy things in Euro without a 3% fee for foreign currency.
I have 3, two that I actually use.
One has high rewards on everything. One has particularly high rewards on a few categories but low on other things, and one I signed up for just to get some bonus for signing up for it, and haven’t gotten around to canceling it. I don’t carry it with me, so it’s nice to have a reserve credit card at home if my wallet were to get stolen.
People who have more than 5 or so are almost certainly bad at handling money.
I have 5 credit cards. I only use one and pay it off monthly. I have that many because one aspect of credit ratings is your debt to total available credit ratio. Having a $1000 balance looks better when I have $50K in available credit versus when I have $2K of total available credit. I don’t think a single creditor would give me a $50K credit limit, but a combination of them will. Also, I got one of them (an Amazon card) because it was a free $50 in my pocket off my order (or something like that.) Who am I to say no to free money?
Also, I keep the unused cards at home in case of emergency (if I lose my wallet or something.)
Anyhow, that’s enough credit cards for me. I haven’t applied for one in three years or so, but that’s why I have five.
Some may have a lot due to App-O-Rama’s. Transfering balances to money market accounts to take advantage of arbitrage differences in interest owed vs. interest earned. So it may not be that they’re finanicaly ignorant, but quite smart as long as they keep up with the minimums, and pay back the balances once their due.
You could have 20+ easily if you do this enough.
This might be a factor. As a matter of course, when your bank hands you an ATM card, they may give you something that doubles as a debit card against your checking account. I had to specifically request an ATM card that was just an ATM card. I don’t WANT a debit card against my checking account. And store cards aren’t as prevalent as they once were, but a few stores still actively push them. There’s also the card that comes with a home equity line.
Still, while that might explain a couple of the cards of a very high number, it’s still undoubtedly true that many people are carrying an extraordinary number of actual applied-for credit cards. And maxing out a disturbing number of them.
I have 3. I really only carry and regularly use one. The other two are the one I used to use and a home equity line card. I’m somewhat embarrassed to admit that I went to cancel the old card when I started using a new one whose features I liked better, and allowed them to talk me into keeping it active. I don’t carry it. The home equity line is something I got to have reserve credit in case of emergencies, and to place actual home repairs and improvements on. I’ve only ever used it by transferring funds, but a card got issued for it, which I don’t carry.
Although I recognize accumulating credit card debt in the first place is undesirable, if you happen to find yourself in that situation, why would doing this be a bad thing? I happen to have some credit card debt that I’ve been juggling for about 2 years with 0% BT offers and haven’t paid a dime of interest on it yet. Again I know it’s not ideal to have the debt in the first place, but why not do this instead of paying interest? Credit rating impact?
I have multiple cards to keep track of multiple accounts. I put business purchases on one, home purchases on another. I use a third account for all my Internet transactions (so if there’s a security breech, I can limit the damage). My wife uses a fourth and my daughter another (with my name on it).
I pay off my balances every month, so I have no problem handling money. Another advantage is that the cards are due at different times, so I can play with the float and also not have to pay all my charges with the same paycheck.
Same as above. One primary for me, one primary for wife, another primary for all recurring pre-arranged payments. If any one gets fubared, the others aren’t affected.
Then one for my business, one for hers, and one from my employer.
And a couple spare just in case.
All of which are paid off monthly.
And two more that we got 2% APR on. I bought a car on one of them and a houseful of furniture with the other. They’ll pay off eventually, but what’s not to like about a lot of money borrowed at 2% with a negligible miniimum payment? Hell, if I could refi my mortgage on one of those cards I’d be in like Flynn. Meanwhile, *my *money is invested.
Then there are debit cards for each checking account (4), the HSA accounts, etc.
You’re really able to game the system for 2 years with absolutely zero fees and interest? Really? If so, then, no snark, I salute your abilities.
I’m not sure how many I have or what have or haven’t been closed. They just sort of accumulate. There’s only one that I really use. I had a Discover to use at Sam’s, but they’ve been taking Mastercard for a while. Old department store lines are probably still open. Not sure why I have one from my savings bank. Years pass; stuff accumulates.
People who ride long distances on motorcycles need several credit cards. Small fuel purchases throw up fraud flags (thieves do this to verify that the card is active), so holds get put on the card and you need another one to keep going.
I’ve been doing it longer than that, five or six years at least, with balances over $15,000 at the peak. (I’m down to less than $4,000 now, and will probably clear most of that in the next six months.) I’ve paid no interest, and a relatively small amount in fees. Balance transfers often (but not always) entail a 3% fee. I’ve gone through dozens of credit cards this way, transferring balances from one to another when the 0% rates end.
I keep four or five cards active at a time: a couple with 0% on purchases, and a couple with 0% on balance transfers. The latter kind are never used for purchases, as that would involve interest charges. So I usually destroy those cards as soon as I get them.
I always pay well over the minimum amount due on all of them. I have a spreadsheet that shows how much I have to pay each month to clear the balance before the 0% rate ends. If I don’t manage to clear the balance before then, I start looking for the next offer and transfer it in time.
I have never made a payment after the due date. (FYI: the CC companies consider a “late payment” to be one that is 30 days past due.) I routinely get the three free annual credit reports to check on the status of my credit. (I **never **pay for credit reports.) I once found someone else’s accounts mixed up with mine at one of the reporting agencies, but after I reported it, they cleared it up in a couple of months.
My FICO score is always 800 +/- 20 points. One of the keys to keeping it high is to make sure that you are using no more than about 20-25% of your total available credit, and that no one card has a balance over 50% of its limit. People often say you’ll get in trouble, or you can’t keep it going, or something. But I’ve had no problems all this time.
I have noticed that the 0% offers are much less common now, and are for shorter terms – six months instead of a year. But I still get them, and I’ll probably take advantage of them as long as I can. Interest-free loans are okay with me.
Yes, I have a line of credit with USAA that gives particularly favorable deals, and they let me hold a balance at 0% for a year, then I switched it to another card for a few months, then they gave me another 0% offer (didn’t even pay a BT fee!) for about 9 more months after the first one.
Of course, USAA is a particularly awesome company. You can’t really compare them to others.
I have a lot of cards accumulated over time, although I typically only use one.
My first credit card (here in the US anyway) was issued by my regular bank, and had a low limit, not to mention a lousy rewards program.
Then we got a discover card because the rewards system was quite good.
Then I saw an offer for a free Amazon branded Visa card that gave me $25 off the purchase I was making (so I now have that card, but have never used it besides that first purchase).
Then MasterCard sent us two separate offers that basically totaled close to $200 worth of Amazon vouchers up front, with a very generous rewards program for future purchases.
We still have all these cards, although we typically only use the one MasterCard (its rewards program is particularly generous if you use it to pay for travel, and I’ve traveled a lot on business recently). I’ll add that we always pay this balance in full, and have never paid a cent in fees or interest against any of these cards. We use it for the purchases we would have bought anyway, and have probably accumulated over $1k worth of rewards in the process.
Oh yes, and my company gave me an American Express which I never use, so that puts me at five. I didn’t plan specifically to have so many cards, but they do add up over time!
You can often play one against the other. For instance, two years ago I had a 5/3 card. I cancelled it. Today I was able to get a special offer “sign up 1 free year of interest on my balance transfer.”
This will save me money.
I do the same for Citibank AA. I get it for a year (first year free) after I charge $500.00 they give me 25,000 miles. I then cancel after the first year when it’s no longer free. The a year later they say “Why not come back,” and make me the same offer
Since I pay all but one card off every month, I have good deals. But I will say, you must be careful, 'cause one slip up and you’re screwed.
It used to be great with balance transfers for zero interest for a year and $50.00 cap on the trans fee. Now I noticed Chase bank removed that cap. So now instead of 3% fee on balance transfer with a $100 cap, it’s NO CAP on the fee.
So you can do really good if you play one off against the other. The trick is to ALWAYS pay everything off at once and CC play games. I noticed my Bank Of America keeps moving my due dates around. They also will schedule my due date for a Sunday. So if you pay online, you have to make sure you schedule a payment ahead.
Like I said you have to jump through hoops but if you read all their rules carefully it’s possible to get good deals.
I have a Chase - Starbucks and I pay it off every month so I get about $20.00 worth of coffee a month for free. That’s like 2 cups 