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When do I have too many credit cards?

On Behalf of | Feb 20, 2024 | credit card debt |

It is common and often even necessary for people to have more than one credit card. Multiple cards allow you to take advantage of rewards programs and provide a safety net in case of emergencies. However, possessing an excessive number of credit cards may lead to burdensome debt if you are not careful.

Generally, financial trouble happens because of particular issues stemming from having too many cards.

Trouble keeping up with payments

Juggling due dates across numerous credit cards inevitably leads some borrowers to forget and miss payments. Not only will you incur late fees and penalty interest rates, but missed payments also damage your credit score.

Busting your budget

The allure of access to substantial credit may be too tempting to resist, which can be the case with multiple credit cards. The more cards you have, the higher your buying power and the harder it becomes to resist the urge to spend.

Paying more in fees

Many premium credit cards charge annual fees, which can easily exceed $100 per card in some cases. While fees can be worth it for cards that align with your spending patterns, too many unnecessary fees strain your budget.

Neglecting rewards

If your debt is going up, chances are that you are not availing yourself of the rewards on your cards. Earning points and miles can be enticing, but card rewards provide no value unless used. You might be able to redeem some of your purchases with your accumulated rewards and reduce your card balances.

While credit cards offer convenience and perks, too many cards can do more harm than good. Implementing a strict budget and consolidating your card payments could help you get a grasp on your situation. However, if your credit card debt balloons out of control, bankruptcy may be an option.

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