How Many Credit Cards Do You Really Need?



Personal credit opportunities are widespread, tempting UK credit card customers to utilise a wide array of alternatives. As a result, it’s not uncommon for individuals to maintain several open credit card accounts. Convenience, ready access to financing, and other advantages fuel the brisk credit card business, but are UK consumers juggling too many credit cards, per person?

Discretionary credit use has been under scrutiny in the UK in recent years, as card holders lean heavily on revolving finance opportunities. But the metrics used evaluating individual debt and the overall scope of national personal debt typically focus on figures representing what’s owed and whether or not UK card users are in over their heads. Closer to home, the number of cards you keep presents another personal finance standard worth looking at. Do you have too many cards? And what’s the correct number of accounts to keep active?

The Upside of Activating Multiple Accounts

It isn’t all bad news for card holders with multiple accounts. On the contrary, activating a number of cards can help you take advantages of the benefits associated with each account, such as:

  • Rewards Programs – Air miles led the charge, but credit card programs now reward users in several different ways. Dependent upon your spending habits, it may be worthwhile to use more than one card in order to secure rewards. Some consumers choose to assign a particular card to certain tasks. For example, using a rewards card for day-to-day spending is a speedy way to accumulate purchases and rewards perks.
  • Balance Transfer Opportunities – High interest charges are notorious for undermining financial health. Card holders who carry-over balances from month to month are familiar with the phenomenon, generating sizable interest payments over time. To hedge against growing balances, complicated by interest and fees, some credit card companies offer balance transfer incentives for new customers. Opening multiple cards may enable you to move your most expensive debt balances to a card with a lower rate. Continually bouncing balances from card to card is probably not a good idea, but transfer opportunities do justify using more than a single card for all your revolving credit needs.
  • Interest Deals on Offer – In addition to balance transfer options, some credit cards offer attractive introductory terms for new applicants. If you’re not satisfied with the interest rate offered on your current credit card, opening another account can help you take advantage of lower rates on future purchases.

What’s the Downside?

Credit cards aren’t your only finance option – even if your credit history isn’t perfect. As long as you’re employed, payday financing is available, floating a small loan until your next paycheck arrives. The loans are typically funded quickly and repaid within weeks. On the other hand, carrying multiple credit card balances can stretch debt repayment far into the future, complicating your household finances.

  • Hard to Track Spending – Placing charges on multiple credit cards can make money management murky. With too many balances to monitor, it is easy to lose track of important details, or worse, miss payments.
  • Temptation to Spend Too Much – Access to various credit sources can be an invitation for some consumers to spend too much. Not only is it easier to overspend as a result of poor account management, but with a high overall credit limit, spread across multiple cards; the temptation to spend beyond your means can also undermine your financial health.
  • Credit File Impacts – Carrying too many open credit card accounts can drag down your credit score. Unfortunately for consumers already burdened with unneeded cards, closing accounts can also have a detrimental effect on your credit score. For these reasons, it’s important to measure the pros and cons of keeping more than one credit card account.

In addition to your total obligation with creditors, it’s also important to consider the number of credit cards open in your name. While maintaining more than one account has an upside, you should also weigh the potential disadvantages of keeping too many credit cards.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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