Credit cards can provide a significant benefit for many consumers, allowing them to finance large or important purchases without requiring them to possess large amounts of liquid cash. However, having too many open credit accounts can lead to serious problems, like declining credit scores, unaffordable bills and debilitating debt. Data from Experian shows that the average consumer in the U.S. has three open credit cards. While this number may be manageable for some Florida residents, others may be unable to cope with the consequences that come with multiple credit accounts.
One critical sign of having too many open credit cards is an inability to make payments on time. "Having too many credit cards can lead to the lack of time and focus to ensure proper credit card management," explained one financial planner. Many credit cards mean many statements each month. If you have difficulty keeping track of all of your accounts, experts recommend closing some until you are left with a manageable number.
Any time you rediscover credit accounts that you have forgotten about, you should close them. It can be tempting to apply for new cards that offer bonus cash, airline miles or other rewards, but you should only do so if you can dependably use those cards and pay their bills on time. Having too many open accounts can also damage your credit score, with each new application negatively affecting your score. If your credit report lists "too many revolving accounts" as a risk factor, you should consider closing some of your cards and begin ignoring new offers.
Too many credit cards can also make it difficult to qualify for a mortgage or auto loan. According to one financial expert, many lenders look unfavorably on potential borrowers with more than five open credit card accounts, even if some are unused. She explained, "The loan officer realizes that you could use all of your credit cards after the loan is approved, and that will affect your ability to repay the loan."
Source: The Street, "How to Tell If You Have Too Many Credit Cards," Marilen Cawad, Aug. 14, 2012
Source: http://www.ftlauderdale-bankruptcyattorney.com/2012/08/how-many-credit-cards-are-too-many.shtml
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