What's the ideal number of credit cards one should have? A credit card is an essential tool to build your credit history and your credit score. It is one of the best alternatives to cash, allows you to purchase and repay your dues on credit which can be paid later along with a certain amount of interest. The credit limit of the card depends on your credit behavior, your monthly income and your ability to pay back the credit amount. Is there a perfect number? There is no such limit on the number of credit cards one can have as it completely depends on personal preferences and financial ability. People often take more than one credit card to divide or have a bigger credit limit in total. It often gets a little grueling to manage more than one credit card as a delay of one payment can show an adverse effect on your credibility and credit score. Ideally one should not have more than two or three credit cards as having too many credit accounts portrays credit hungry behaviour. Below are a few facts that can help before you decide on the ideal number of credit cards you want to have. A travel bug? You need more than one then! When you are always travelling, you should have more than one credit card to be on the safe side. Often there are two types of credit cards, one being an international that works outside the country too and one is the national one which can be used within the country. In case you lose one credit card you should have one more ready to use it while in crisis. It helps you stay away from too much cash while travelling. A shopaholic? Keep more than one! If you have the tendency to shop more or often you should consider keeping more than one credit card to divide the load. If there is one credit card and you do not maintain the credit utilization ratio, then it might bring a dip in your credit score. A deal hunter? Try cards from different banks! You can own more than one credit card from different banks to get the maximum benefits. Every bank has a different set of benefits to offer. Do not go overboard with the credit cards as it will not be a piece of good information to be on the credit report and will affect your credit score negatively. Few tips to maintain your credit cards and build a better credit history: a) Practice due diligence to avoid late payments for your credit card bills as it levies heavy late fees and interest. This eventually brings a dip in your credit score and questionable credibility. b) Make sure the credit utilization ratio is on a check. Spend around 30 to 40% of the credit limit, it shows stability and control while dealing with credit.
c) If you must apply for more than one credit card, apply in long intervals. Use a credit card for at least a year before you apply for your second credit card. The best way to know what is working for you and what is not is by checking your credit report with an RBI regulated credit bureau like CRIF. CRIF is one of the most popular credit information companies in India for finding credit score and downloading personal and business credit report. Also, it is compulsory to have a credit score above 700 to get a credit card with the best deal and credit limit. It is mandatory to check your credit report and credit score once every year to know where you stand financially.