Maximum Benefits By Keeping Credit Cards To A Minimum

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While having a wallet filled with credit cards may appear to be convenient and a status symbol, it may well jeopardize your chances of getting a mortgage or loan. To the lenders, the credit available to you on credit cards is outstanding debt whether or not you use them or intend to. Therefore if you have four credit cards with a consolidated credit limit of $100,000, it may result in the bank turning you down in case you lack the resources to repay the amount, in spite of having the ability to repay the loan being applied for.

Keep only the absolutely necessary credit cards. Don´t carry the extra credit cards you rarely use as they only lead to the temptation of overspending with too many credit cards. Several small monthly payments can be less of an inconvenience for some instead of one or two larger bills. It can get very difficult to keep track of purchases made and the amount that has been spent when there are many credit cards. For creditors you may also be seen as poor credit risk due to the amount of credit available. Even if you don?t carry large balances, multiple credit cards mean monthly bills for each and you may miss a payment or be forced to do so in lean times. Then there is also the potential to run up large amounts in debt. The more credit cards you have, the more reluctant new creditors may be to give you more.

With minimal credit cards, the biggest risk of credit cards can be safely avoided. This risk is that many credit cards and their use with respective interest rates may prove harmful to you. Credit cards with higher interest rates cost you more if your balance is not paid every month. Then using a higher interest rate credit card and failure to pay its bill in full within the due date may be a bigger burden. Consider the interest rate of each card. Overcharging can seriously damage your ability to build wealth. Keep the cards with lower interest rates and cancel those with higher interest rates.

Nowadays issuers no longer allow 10 to 15 days for a payment arrival after the due date without charging a fee, which can prove to be very difficult for a person with many credit cards. Dwindling grace periods give customers less time to pay bills after their arrival. With minimum credit cards, you can eliminate the risk of paying extra fees.

Most credit card issuers regard customers as fair game for various marketing offers which is why you may get offers in the mail offering you more credit cards. Such offers claim that you are pre-approved for the card. With minimum credit cards you can do away with the inconvenience of these offers.

According to Steven H. Austin, executive vice president of Bank South in Tulsa, OK, ¨federal privacy rules allow you to opt out of such marketing, but doing so usually isn´t a simple process.? Two cards with $5,000 credit limit are preferable to 10 cards with $1,000 credit limit. Get the most out of credit cards by keeping the best credit cards with the least number of them.