The leaflets through your door, everyone telling you “you need to get credit to improve credit” leaves a lot of people feeling like they might as well apply for and get as many credit cards as possible. Afterall it’s ‘free money’, right?
However I don’t think the cited benefits of having a number of credit cards give enough benefits to warrant having as many as you possibly can.
In my perfect world no one would have any credit cards. Of course that is an ideal, in a world without credit and without debt of any kind. I know that I have to live outside of that dream world though but still I am conservative when it comes to how many cards I think people should have and that is due to experience.
Gather round, a sorry tale…
I had great credit once upon a time. Back then I was on good money so I pretty much applied for every credit card I could. I believed it would help grow my credit rating and give me multiple forms of backup in case I was somewhere and needed access to some cash. I’m the kind of person who likes backup plans so it was easy to justify it that way!
I ended up with 5 cards. It was fine for a while until I slipped a little into using the first credit card. I believed I would pay it off each and every month and stay in the green. Then I slowly ended up maxing that one out, so I justified that it was ok to move into the next one until I straightened myself out.
The rest is history!
Temptation of the Credit
Temptation is the problem. Unless you have substantial amounts of savings and very well planned budgets the likelihood is that you will slip into using however many cards you have with self justified reasons. Temptation is practically the whole basis of the credit card companies business model and how they end up making the majority of their cash.
So I believe for most people that no credit cards are needed. If you absolutely feel you need one, then one is all you should have.
Life after Credit
Now how would you live without a credit card? What about all the services that require the use of a credit card such as renting a car?
My bank has given me a VISA Debit card and I also have a backup VISA debit linked to my PayPal account. To date I have not come across one service or payment that cannot be done with a VISA debit. Sure I don’t get points and all that jargon but I don’t get in debt either.
I’ve made a decision not to use credit again so the need to improve my credit score isn’t required. I am no expert but for the sake of mortgages and such things I would imagine that as long as you have maintained good bank account activity and maybe just one credit card or small loan over a period of time that it would be enough for them if you meet the rest of the criteria?
So do you agree with me? Is it realistic in this day and age not to have a credit card? Do you survive, like me, without one?
If you absolutely feel you need a credit card then you have to do your research. A decent resource like that from Free Money Finance can be a good start to comparing and getting an idea.
Thanks for reading and I look forward to your thoughts and opinions. How many credit cards do you think you need and how many do you have?