Scott, you have too many credit cards!
by Scott Bilker
Ask Scott your question! Scott Bilker is the author of the best-selling book Credit Card and Debt Management. He's also the editor and publisher of DebtSmart.

Scott BilkerScott,
I read your article in which you state that you have 80 or so credit cards. I'm not sure why this is advantageous. I have cancelled all but one card which I pay in full each month and by no means see my "options" (to get into debt, I guess) as being restricted.

For instance, I did need to carry a balance for 3 months to pay for an engagement ring at the beginning of this year. All I did was charge it to my everyday card, which has a lousy rate but gives me perks, get a new card with a low rate so I paid almost no interest for those three months, then closed that card when it was paid. This is actually better than calling the banks for the best rate because the cards with the perks almost always have the lousy rates, so you're better off putting it onto one of those cards, and then transferring it to a lower rate card, then you get the perks.

The problem with having multiple cards that go unused is that potential creditors will count available credit against you when you apply for a mortgage or a car.

Also, the more open accounts you have, the greater the chance of being defrauded. Having only one card is by no means restrictive there are hundreds of companies who would give me a card after a 5-minute phone call. I just don't see the point in keeping cards that aren't being used open. --Keith

Answer
It's true. Between my wife and myself (joint accounts) we have over 80 credit cards!

WARNING, I am NOT advising anyone to go and get 80 credit cards! The more credit lines you have available, the greater the probability you'll increase your debt, obviously.

So why do I have so many cards?

There are many reasons:

1) When I borrow money I want to have many loan options. About half of my accounts are offering me low-rate transfer deals all the time! I have purchased used cars with my credit cards at 0%! And because I have so many cards I can continue to transfer the balances and keep the rates less than 4% all the time. I've been doing that for more than 10 years! 
2) I'm into this topic, saving money on credit cards. How can I write about credit cards if I don't have credit cards? How can I verify good credit card offers if I don't ever receive or use any?
3) I actually enjoy trying to uncover the true costs of credit. I need lots-o-data!
4) Who would you want writing about credit...someone who hasn't had or used a credit card for 25 years or somebody who deals with credit cards all the time?

I don't carry a balance on all of those credit cards. If I did, then this article would be about bankruptcy not being "debt smart."

If you think 80 credit cards are a lot then how many do you think the worlds record is?

According to the Guinness Book of World Records Walter Cavanagh of Santa Clara, CA is "Mr. Plastic Fantastic" and blows me away with a total of 1,397 unique accounts! I couldn't even image juggling that many credit cards.

Next, your strategy for using a card that gives you perks, at 0% for purchases, is good. You used the perk card then transferred the balance to a low rate card. When you were done you closed all the accounts. That's great!

I personally don't close the accounts as long as the banks aren't charging me an annual fee. I keep them open because they ALWAYS give me a great offer within a couple months after my balance goes to zero. I don't want to keep applying for new accounts and closing accounts.

It is true that you're going to have a difficult time getting a mortgage if you have many open credit lines--even if the balances are zero. That's because the bank doesn't want you to have the potential to get into credit card trouble since it could affect their mortgage profits.

How many cards are too many?

When you apply for a mortgage the bank may ask you to close some credit card accounts before they grant you a mortgage. When I purchased my home I had 24 credit card accounts and I got the mortgage with no problem and no questions asked. Each bank has it's own lending policies.

As far as having a greater chance of becoming a victim of fraud, I doubt the number of cards is going to make you a greater target. In the last email newsletter my friend, Robert Gamble, told his story of identity theft where someone was trying to get new credit lines in his name.

Actually, when you think about it, someone would have a difficult time getting new credit in my name. If they tried they'd probably get rejected because I have so many accounts right now. If I only had 2 accounts open then it would be much easier for someone to defraud me with identity theft. Ironic isn't it?

And since I don't carry all those credit cards with me, I only carry 2 in my wallet, I don't have to worry about losing the actual cards. Also, I keep a list of all the items in my wallet just in case I do ever lose it. Plus I have every account and every phone number in a database so I can contact each bank if there ever was a problem.

You said that you don't see the point to having that many credit cards. The point is a personal point, Scott's choice, for Scott's reasons. It works for me and may not work for everyone. I attribute getting out of debt to having all those credit cards. I learned how to beat the system by being immersed in it and developing good "Credit Card and Debt Management."

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