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Home >> Lending >> Credit Cards
Multiple Credit Cards
When I was in college, I got a credit card and used it a lot (too much). Now that I'm working, I've accumulated several others. I seem to get offers in the mail for pre-approved credit cards frequently, and if the rate is better or the new one would give me cash-back or airline miles I have sometimes sent the paper back in to go ahead and get the card. My friend and I are having an argument. I say that the fact I have thirteen credit cards shows I'm a good credit risk and will help me when I want to get some other type of loan or maybe buy a house. She says it could hurt. Who's right?
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 Two things will matter: how much available credit you have already and how you've handled the credit you have. If you already have thirteen cards and you could charge up to, let's say, $50,000 in the aggregate on them, that's a lot of potential debt and any new lender being asked to loan you money would look at the fact that you could be $50,000 in debt (besides the loan you're asking for from that lender) in a flash, so they'll look at your whole financial picture to see if you could quickly be in over your head. Too much credit can hurt you that way, even if you aren't actively using it right now. Choose the cards with the most favorable rates and terms and write to the others and voluntarily close the accounts. Then, the next time you obtain a copy of your credit report, check to make sure those closed accounts show they were closed voluntarily.
The other aspect of the issue is how you've handled the credit you've gotten. Have you paid on time? Have you kept your balance within the approved limit? In other words, have you used credit responsibly? The more credit card bills you have coming in, the more chance there is for one of the bills to slip through unpaid, or to be paid late. When that happens, you're putting a black mark on your credit history. We would tend to side with your friend on this argument.
Published on BankingQuestions.com 7/28/06
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