One Card Too Many: How to Tell If You Have Too Many Credit Cards
You like using your credit card to pay for purchases. There’s nothing like not having to carry cash whenever you go shopping. Who even needs it when you’ve got a credit card, right?
But sifting through your stack of cards, you wonder if there’s such a thing as having too many. You’re considering getting another one, but these lingering doubts are giving you pause. How many are too many?
Here’s how you can tell if you have a credit card problem:
You’ve Got a High Debt-to-Income Ratio
When you want to apply for a loan or make a purchase, lenders will take your debt-to-income ratio into consideration. If your credit cards are almost maxed out, they will consider this to be a major problem.
They need proof that you’re responsible, and that you will be able to pay all your debts back on time.
Make sure you don’t have a high debt-to-income ratio. Your ratio shouldn’t be above 37%. We recommend that you keep it below 20%.
You Have High Credit Utilization
Your credit utilization helps you figure out how much debt you’re in. The score should not exceed 30%.
So, if your credit card’s limit is $5,000, and you’ve spent over $1,000, then your credit utilization is 30%, which is what it should be.
But anything above that, and you’ll get charged more interest. This will make it difficult to pay back, and you’ll end up accumulating more debt.
You Struggle With Managing Your Credit Cards
This is the biggest indicator that you have too many credit cards. If you struggle with keeping up with your credit cards and payments, then you know you have a problem. You need to be able to keep track of interest rates, payment dates, dues, and charges.
Otherwise, we recommend closing your accounts and only keeping one or two open. This will help you manage your finances better and you won’t struggle with making payments on time.
Having to pay for more than one credit card every month can quickly become hectic. It’s better to close your account and figure out other ways of paying for your debts and purchases.
If the damage is already done, a credit repair company can help you manage your finances better and help you figure out the best method of payment when it comes to loans.
This is where we come in.
Our professionals can guide you through the process, help you negotiate with debtors to remove any errors and discrepancies from your credit history, and improve your credit score.
We provide free consultation services on a first-come-first-serve basis. Sign up without a delay so we can get started right away! We serve clients in Michigan and all over the US.