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Credit Cards - How many is too many?
mangobloom
Posts: 4 Newbie
in Credit cards
I've recently got one credit card to rebuild my credit after two defaults a few years ago. I'm amazed to see it's doing wonders to my credit already just a few months in as I pay back each month. Is it wise to get another to essentially double the speed of rebuilding my credit? Also, is it ok to get another so soon after getting the other in august / september?
Also, how many cards is too many? I saw on a previous forum post 8 years ago on here that said as long as available credit is not more than 50% of your salary. Do they mean yearly salary?
Also, how many cards is too many? I saw on a previous forum post 8 years ago on here that said as long as available credit is not more than 50% of your salary. Do they mean yearly salary?
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Comments
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I would give it 6-12 months before applying for another. There was a reason you defaulted in the past and you need to learn self-discipline to avoid that again so baby steps are best here.
if and when you decide to take out another CC, make sure it’s working best for you (I.e. cashback/rewards/0% on purchases), always use eligibility checker on the lenders own website first.Save £5k in 2024 challenge #32
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There are no definitive answers to your questions. Your credit is not a 2D thing which uniformly increases or decreases, so get the idea of another card "doubling the speed" of your credit worthiness improvement out of your head.
I certainly wouldn't be worried about having more than 1 card on my profile, and searches drop off after 1 year so that's nothing to worry about if long term credit worthiness improvement is your aim.
If this other card will bring you some advantage over and above your existing one (i.e. rewards - Asda and Tesco have rewards offerings aimed at those 'rebuilding'), I'd say go for it. If your existing limit is sufficient and you'd get no extra benefit, just keep on doing what you're doing I'd say.
In terms of a limit relative to your salary, again there is no uniform rules; different lenders will have different thresholds which they are comfortable lending with. Aim to have a sensible amount of total credit to meet your needs, but not more.1 -
mangobloom said:
Also, how many cards is too many? I saw on a previous forum post 8 years ago on here that said as long as available credit is not more than 50% of your salary. Do they mean yearly salary?That's the first time I've heard that one. A year or two ago, I had six cards with a total credit limit of about 150% of my gross yearly income. (No, I never got anywhere near to using it all - I've always paid my cards off in full every month.) Since then, I've cut down to four cards (total credit limit about 2/3 gross yearly income), and will soon be cutting down to three cards. As far as I'm concerned, one Visa and one MasterCard is enough provided only that the credit limit is enough for one's needs. Cards simply accumulated as I applied for new ones with attractive cashback offers and didn't drop them when the cashback was reduced/stopped. I'm now making a conscious effort to simplify my wallet a bit.I agree with the poster above: if you've had problems in the past, make sure that everything's under control before applying for more credit. Don't rush into anything. Credit cards are a good servant, but a poor master. Don't let them get on top of you. Think about how much credit limit you need to cover your spending habits and eventually get yourself into the position where your actual credit limit is about double that - having unused credit looks good because it shows potential lenders that you're not desperate. Always, always pay your card(s) off in full every month.
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I've had in excess of my yearly income in credit card limits for at least 20 years. At times I've had more than twice my income.
I'm retired with limited need for credit cards, no balances, and have just had a card closed due to lack of use.0 -
mangobloom said:Also, how many cards is too many? I saw on a previous forum post 8 years ago on here that said as long as available credit is not more than 50% of your salary. Do they mean yearly salary?
I was using most of the credit cards just for direct debits, but they are becoming less useful & spending on them once a month to keep it going has become more of a pain.
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I can't see much reason for having more than 4 cards, providing the combined credit limit is above what you are every likely to need or be able to use safely.
Like many others who have posted, I have a credit limit total that is above my annual income. In my case it's nearly double, and I will be spending about 50% of my income this year via credit cards, but I have saved up for the expenditure, so the cards will get paid off within 30 days.
The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0 -
Its not just credit available, but how you utilise it. Having 10k debt, but 100k limit can look a lot better than having 5k debt with a 7k limit.0
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I've had over 10 cards at a time [I was lazy about closing them] and about 4 times my annual income in credit limits [never gone anywhere near]
Currently got 6, total limit about twice my annual income.
Too many is if it bothers you, I reckon0 -
I had 7 credit card + 1 charge card at one point and still was eligible for other cards. Currently have 6 credit cards.
I'm on a relatively low income and my combined limits are roughly double of my gross annual income. I'm still eligible for most credit cards except MBNA and Santander (who always ask how many cards I have). The problem was when I had high utilisation on 2 of those cards (even though they were on 0% rate), that seems to scare other lenders.
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