Most financial experts recommend having two to three credit cards – one or two primary card and another card in case something happens to the primary credit card (lost, stolen, etc.).
For my post-graduate life, however, I’ve only had one credit card. Although I’ve been thinking that one card isn’t quite prudent, I never actually applied for a second card.
Here’s why I love having only 1 card:
1. Ease of tracking: One card = 1 website, 1 deadline, 1 credit limit, 1 username, and 1 password to remember.
2. Concentration of reward points: I put all credit card purchases on 1 card, so I accumulate points relatively quickly. Eveyr 10,000 points = $100 Sephora card!
Here’s why I think I might need another card:
1. Emergencies happen: if I lose my credit card now, I’ll have to wait for the company to cancel and mail me a replacement card. In the meantime, I’d have to rely on my debit card (which I don’t like to use for purchases).
2. Better credit score (?): If I get another credit card, my total available credit will be much higher, but my total credit use will still be the same. So, my percentage of credit used will decrease, and that should have a favorable impact on my credit score.
What do you think? How many credit cards do you have?
I have quite a few.
1. Main purchases (Amex)
2. Older card used if they don’t accept Amex (MC)
3. Corporate card (Amex)
4. Husband’s older card, a Visa for when Amex is not accepted (made him get my a card too)
5. Capital One Visa for traveling, better FX
6. Macys card, mostly dormant
7. Additional dormant card, on which they cut my limit down to $300. Originally got it for a 0% offer. Just kept it to keep my credit limit higher
Total 7 cards
I normally carry around cards 1 & 5. If traveling for work, I also bring 3. Otherwise, I mostly leave at home.
If I were you, I would get another card and just keep it at home. Then if something happens to your main card (loss, fraud) you have a back up.
Having less cards is simpler!
i love that you use your points for sephora and sephora only.
I have 3 currently: A visa I use all the time, an Amex I almost never use and opened for bonus frequent flier miles (and will close within a year) and a Discover, my oldest card that I added T to. I think two is a good number.
Oh wait, I also have a visa issues by my bank that I never ever use. Hmm… Could probably close that one.
Your reasons are solid, I’d definitely consider it.
That’s the only way I can afford my Sephora habit!
It’s also useful to have a couple different types of cards. I’ve been told, “Our connection to Visa/Mastercard is down now,” and had to use another card instead, and there are more and more places who don’t take American Express because they charge merchants higher fees. I have a primary Mastercard, and AmEx that I use for work (but it’s not a corporate card), and a Visa debit card, all issued by different banks.
I think I might have too many. I have a few regular ones, and a few store cards (which, of course, pf bloggers bash with abandon). I am considering getting rid of at least one of my cards.
I think it would be good to shop around for a second card, looking for a card that fits your needs (i.e. has the right reward system that works for you).
I have had one, and only ever had one, for the last 7 years….
perhaps I should get a second?
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I’ve been thinking about this for some time now. I have a Mastercard, Visa, and an American Express. I’ve been thinking about getting a Discover card so I have one from each major credit card company. Been wondering if that would help boost my FICO score closer to 850 🙂 I also have a Chevron gas card that I was told to get because they supposedly help boost FICO scores.
Anyhow, my wife’s purse was stolen and went through heck trying to cancel our cards and replacing her cell phone, car keys, etc. Luckily I had one credit card that was not in her purse and I used that to help get our lives back in order. It was quite surprising how useful that credit card was in that crisis. Make sure you get one more card for emergencies and put it in a safe place.
I have three cards, but I hardly use any of them:
American Express
Discover
Visa (from my bank)
I prefer to use my debit card for everything.
I have zero credit cards. I use my debit card for everything…and so far, I’ve liked that. I have GOOD credit (from car payments, rent, cell phone, student loans, etc) – as far as I know anyway – but not very MUCH credit.
I have recently been thinking that I should get a credit card to use for things like bills – where I know I will pay it off each month. I don’t worry about making extravagant purchases I can’t afford; I worry that I’ll use my credit card for basic purchases and “forget” that that money is no longer really available to use in my bank account, and then think I have more money than I really do…does that make sense? I guess I’d just have to be more careful about keeping track and knowing that the balance in my checking account isn’t truly accurate.
Does anyone recommend a particular credit card for a beginner? 🙂 I have Wells Fargo, and I want a card with some sort of rewards but no annual fee. Interest isn’t a huge issue because I plan on paying it off each month.
Thanks for any advice, and thanks for blogging about this!
I have three. The first is a VISA from my bank that I use for most everything. (And I love those great Sephora rewards cards too!)
The second two are store cards. One was a huge mistake and I’m planning on getting rid of it pretty quickly after its balance goes to zero. The other is also a VISA that can be used elsewhere and has proven to be extremely useful as a backup card. It is from a store that I shop at fairly frequently whenever I need clothing, and is also very good as far as benefits and rewarsd for cardholders go. It’s credit limit is much lower than my bank VISA, which makes me feel better about carrying it around.
I basically keep the bank card at home and use it for bills and groceries, only bringing it out when I plan on using it. The store VISA is great to keep with always, and for small, unexpected things like gas or an impromptu meetup with friends, because I don’t like carrying cash.
I have several credit cards, and they’re all great for different things. My Citi Mastercard is my oldest and the one I use when I need to buy anything online or when I make a big purchase (because they give 1-5% cash back).
When I was buying furniture and a new work wardrobe I got a Nordstrom Visa (that can be used anywhere but gives Nordstrom rewards) to take advantage of the rewards because I was doing a lot of shopping there. That card also has only 1% exchange fees when I’m traveling internationally, compared to 3% on most other cards.
Then just last year I got an HSBC card to take advantage of a year long 0% APR so that I could put my tuition bills on it while I waited for my company to pay me back (which happens months later after classes are done).
Other than that I have a Banana Republic and a Victoria Secret card which I got in college but rarely use. So that makes 5, with a total limit of almost $30,000. It does make me feel good to have that as a safety net, hoping of course that I never have to use it.
I have 5…
1 AmEx (because it currently gives me the best rewards)
1 Discover (was my 1st ever credit card)
1 Visa
1 Firestone Mastercard (they give me crazy discounts for oil changes, which is useful… and the only time I ever use it)
1 Amazon Visa which I need to close, I opened it up for a discount but now I never ever use it so it’s kindof pointless.
I definitely think there are benefits to having more than just 1. I use Discover for gas because you get 5% back. And my standard is my AmEx. But it’s useful to have a Visa around just in case the place won’t take either Discover or AmEx. At least this is how I view it. I also have a tendency to open (and subsequently close) store cards quite often just to get a really good discount if I’m making a large purchase.
Why don’t prefer not to use your debit card?
Too many! But I DO think you should get another one for all the great reasons you listed above. 🙂
I use 4 but have way more.
1 of them carries some leftover debt.
1 of them is my primary card. (AMEX)
1 of them is for just utilities. (easier to track)
1 of them is my backup card when they do not accept AMEX.
When you apply for credit, I’m pretty sure there are 2 parts to the utilization score.
1 is like you said, a use/available credit metric. If you continue to use $400/month, having an additional card with more credit will lower this percentage and be good for your score.
A second metric that they use is use/available credit on a per card basis. In other words, it doesn’t matter if you pay off your card every month! If you use $400/month on a credit card that has a $1000 limit, you have 40% credit utilization some time during the month. When you do your credit check (applying for a new card, applying for a loan) then becomes massively important.
If you’re worried about credit utilization, I suggest you also consider asking for a higher credit limit on your card (if it’s relatively low compared to what you spend).
Note that these are “facts” that I’ve picked up and the rules may have changed.
I have one credit card that I got a year ago. It’s a CapitalOne Mastercard and was the only/easiest card I could get, since I had zero credit history prior to that! (Couldn’t get any rewards cards, unfortunately.)
It has a low limit, but I use it once a month just to keep it active/build my history, since I pay it off in full each month. I know I will get another in the near future (1-2 years) that gets rewards just so I can use it to my advantage. 🙂
Good luck! Let us know what the outcome is!
I work for a bank, and let me tell you, there are so many people who come in and apply for a second card, whether their first card is with us or another bank, because they need it really quick. There have been so many situations where people need another card because their primary card was lost/stolen so it takes a few days to get the replacement, now they are stuck without a card. I highly recommend getting a second card. You don’t have to use it, except once every other month to keep it active, but keep it handy. You never know when you may need it. As a banker I tell all of my customers to open a second card, whether thats with my bank or another bank, as long as they have two cards they are better off than having one.
That’s definitely a good point… I don’t want to be caught unprepared if my one and only card goes missing.
I have two cards, both with my credit union.
I have the one I use daily. The second is used for e-paying monthly bills (gym, cell, etc.). I’ve had my primary card shut down 2 or 3 times in the last few years due to fraudulent activity. I wasn’t liable for any of the $, but anchoring my bills to the 2nd card that never leaves home saved me a lot of headaches since I did not have to update all of my e-pay bills.
I don’t want to divulge how many credit cards I have on the grounds that I might incriminate myself. LOL!
However, I think your financial experts are right.
That being said, I’m assuming you already have an awesome credit score, so I don’t know why it would need to be THAT much higher. So long as you only have 20-30% of the full balance on your credit card, I think it’s fine not to open another.
Currently, I have too many credit cards and am working to pay them down and eventually close most of them. However, I have put some thought into what my final cards will be. I’ll keep my credit union’s visa card and my AmEx Blue Cash.
1. The cards I’ve decided to stick with are the one’s that have treated me best during my climb from debt and the current credit crisis (i.e. not raised, and sometimes even lowered my debt) Those are:
2. The AmEx blue cash card gives up to 5% cash back on most purchases
3. And, since AmEx isn’t accepted everywhere, the Visa card from my credit union
It’s smart to have 1 – 2 cards because, as painful as this may be for some personal finance bloggers to hear and admit, it’s tough to get around with just a debit card. Especially if you travel for your job like I do. Try renting a car or staying in a hotel with a debit card? They really make it more difficult for you.
I think you have a good plan with the sephora cards because it’s something you value and it’s better than spending “real” money on it (I get all my cologne from there). But for your next card I would recommend trying to get some type of cash reward – only because with the tightening of credit card rules in Feb 2010, those reward programs may end up being pretty weak to non-existent.
Let us know what you decide…
KC
climbingfromdebt.com
I have two (a MasterCard and a Visa), and I won’t be getting any more. At one time I had tons of dept. store cards, all of which I got rid of because they’re just too dangerous. I rarely use the Visa but it helps my credit because I’ve had it for over 10 years now. The MC I use more often has a lower interest rate.
My Visa credit card number got stolen right before I left for two weeks of vacation. Since I’d paid a security deposit and one months’ rent on my new apartment, plus rent on my current apartment, I didn’t have enough cash in my debit account for spending money on vacation. I was grateful to have my Amex as a backup until I got my new Visa! But now I’m in the habit of using both of them, which means it takes longer to accumulate rewards on both…
I have one credit card and am REALLY upset to have lost my wallet yesterday, so now I’m in that situation of having to wait for a replacement. I went to my bank and withdrew some cash to tide me over, but I’m concerned because I need to stay at a hotel this weekend and they will require a card for a deposit on the room. Hopefully I get it in time!
I have two. I use them both equally and pay them both equally. One of them gives me points and one of them gives me dollar rewards.
I lost my wallet a year ago right before I was to travel to a wedding in Seattle…. and the BF’s debit card was getting replaced, so he wasn’t a source for cash. Thank goodness for my emergency credit card stashed in my filing cabinet, which I had completely forgotten I had! That, and my dear best friends who spotted me cash when necessary (bar covers, etc).
Still – point is, an emergency credit card is WELL ADVISED.
I have a debit card, 2 credit cards – an Amex and a Mastercard, and one store card (NY&CO because the points/coupons are awesome). I used to only have the Amex, and got the Mastercard before I left the country for the first time so I’d have a backup. While I am still glad to have a backup, it was Amex that came to my rescue when I had my wallet stolen with 4 days of my trip left. If you don’t have an Amex, I strongly urge you to open one. Mastercard and Bank of America were literally useless when I was stranded in a foreign country with no wallet – I was aghast at how unhelpful they were. Thankfully, I had a new Amex card waiting for me within 12 hours of the incident – lifesaver!! I know it is not accepted everywhere, but after the stellar service I received, I’m definitely a customer for life.
I have a ton that I’ve accumulated over the years.
1. Amex (my first credit card)
2. Chase Rewards MC (it was originally my WaMu credit card)
3. Nordstrom Visa (got it last year to earn rewards with Nordstrom)
4. Victoria’s Secret (I always pay off the balance on this card, but I like to use it because they often give you some good deals if you use your VS card in the store or online)
5. Macy’s (I’m sure it’s dormant because I haven’t had a card for this in like 4 years)
6. Express (Just like Macy’s I haven’t used this card in about 5 years)
7. Chase Slate Visa (My most recent card I got for the 12 month no interest on purchases & balance transfers)
Those are the only ones I can think of off the top of my head.