Credit Cards
There are a lot of different offers from different companies on getting
credit cards. These offers come in various approaches with some promoting
interest-free billing for the first six months, free balance transfers, 15 to
20 percent rebates on your first purchase, free movie or concert tickets,
reduced hotel rates, and other enticing offers.
There are a lot of different offers from different companies on getting
credit cards. These offers come in various approaches with some promoting
interest-free billing for the first six months, free balance transfers, 15 to
20 percent rebates on your first purchase, free movie or concert tickets,
reduced hotel rates, and other enticing offers. Before you realize it, you
are already committed to sign the application form for a credit card, which
will ultimately affect yours and your family''s lives, your financial history
and future as well.
It would be prudent and safe to ask yourself seriously how many credit cards
is ideal for you and your lifestyle. Determine how many cards would be enough
for your purchasing needs while keeping your budget intact. There are of
course, several parameters to observe in finding out exactly what is a good
number of credit cards you should maintain.
A lot of Americans, as statistics would show, have between 5 to 10 credit
cards kept in their possession, with the average household bearing some $12,
000 in credit card payables. This is quite worrisome, considering that the
average annual income of a US household is a little under $50,000 with a good
quarter of it already committed to fixed expenses excluding home mortgages
and auto loans.
Creditors determine a minimum ratio of the consumer''s finances in
determining his credit standing and financial viability. While there is no
secret number of cards to maintain, a good rule of thumb is determined to be
around 2 to 3 credit cards only per household.
It is important to remember that the number of credit cards is only secondary
to your financial and paying capacity. It is not how many cards you have that
matters, but rather how much is your monthly debt balance and the length of
time that you have been carrying your debt. Keeping your outstanding balance
in the range of 25 percent to 50 percent of your available credit limit is a
good parameter. Having expenses beyond that range can send the wrong signals
to your creditors which could ultimately affect your credit ratings.
The creditors can view the summary of your accounts, and if they find that
your payment of obligations is decreasing and your debt is increasing, they
would take action to limit your credit standing. Having a lot of credit cards
would also mean reduced and diminished credit limits.
Keeping your cards at 2 to 3 helps you to better manage your funds and keep
track of your purchases and expenses. This includes bearing in mind the
different interest rates that the different cards charge, together with their
respective billing periods and cycles. A key point to remember is that the
credit cards are there working for you and not you working for your cards.
Keeping only a few cards would afford you to better keep track of your
finances.
In the final analysis, there is actually no fixed number of credit cards to
determine your lifestyle. Even when you make a credit card comparison, you
should always be guided by prudence and good management methods to keep your
financial standing on solid ground.
http://1millionbestproducts.comCredit Cards
By: Chatel Musgrove
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