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How Many Credit Cards is Too Many?
Not all credit card issuers solicit on college campuses, so the best student credit cards are a tricky thing to find. In addition, the solicitors who do come to campus may not be offering the best cards available. Another issue that stems from these campus credit card solicitations is accepting too many credit card offers. Now is the time to ask the question: How many credit cards are too many?
Some of the best student credit cards do not require a minimum income or cosigner; however, it is never wise to get into a financial agreement to acquire debt if you do not have sufficient means to pay it off. If nothing else, the economic crisis of 2008 has taught us this valuable lesson. For those who are unemployed or who do not have steady income, even possessing just one student credit card can end up being too much.
Even if you obtain one of the best credit cards on the market, one missed payment, one over limit, one returned payment, one late payment on your account or even a drop in your FICO score can put you into deeper debt. Anyone of these occurrences can cause the following to happen to your account:
- Your current APR will change to the default APR, which can be anywhere between 23.99 percent and 31.99 percent.
- Your grace period will be taken away.
- Additional fees such as late fees and over limit fees will incur.
Even if you are able to pay each of your credit cards on time and in full, having too many cards is a cause for alarm to lenders. If you have three or more credit card accounts and are looking to acquire additional debt, any potential lender will have concerns about your capacity to diligently pay all of them. This is a valid concern, especially considering the U.S. is in the midst of a recession.
If you are diligent and responsible with paying your credit cards in full and on time, have stable income and are not likely to go over your credit limit, two is your magic number. Carrying two cards is an acceptable practice and can prove useful. Having an additional credit card on hand can serve as a backup for emergencies or when the other credit card in your possession is no longer beneficial and your second credit card has better terms.
In any event, for the college student only one student credit card is needed. The best student credit cards on the market today are the Discover Student Card and the Citi mtvU Platinum Select Visa. Each card offers zero percent APR for the first six months with a standard APR for purchases 14.99 percent. Neither requires a minimum income, cosigner or annual fee. In addition, the visa offers more cardholder protection for disputed charges and is accepted globally, which comes in handy for those wishing to study abroad.
Finding the best student credit card is a great start to building a sound credit history. Also having a student credit card available and keeping it in good standing builds a relationship with the credit card issuer that can lead to potential future lending opportunities. Remember that two cards is a reasonable number of credit cards to maintain and always keep in mind the three C’s potential lenders look for: credit history, capital and capacity. Keeping your cards in good standing will help secure your credit future.
