Shanto Roy

I Explore Research, Tech, Travel, and Business. PhD Student @UHCS.

3 minute read

In USA, using credit cards for regular purchases is almost a daily routine and people usually use multiple credit cards for different purposes. Now, the question comes to our mind is how many credit cards should we have, why, when, and which ones to choose from.

In this post I will try to answer the questions by exemplifying my own experience and credit journey.

Answering the Questions

How many credit cards should we have?

There is no best answer of exactly how many credit cards you should have. Typically, to my point of view is: the more the better. You should have credit cards from the bigger banks who provide increased credit limits. At least, you should have $5/6$ credit cards within $4/5$ years of time staying in the USA.

Why should we have multiple Credit Cards?

There are a lot of benifits of using multiple credit cards. Let’s take a look-

  • More Cashback Offers: Different credit cards have different offers. For example, the Amazon Prime Rewards Visa Signature Card always gives $5\%$ back while purchasing anything via Amazon.com.
  • More Rewards: A lot of credit card companies offer a reward amount if spent a minimum within first $3-6$ months. For example, the Chase Freedom Unlimited offers $200$ dollar when applied via a referrel link and spent $500$ dollar on purchases in your first $3$ months from account opening. So, you have additional $ $200$ after you spent the required amount using the credit card. The Amazon Prime Rewards Visa Signature Card also gives you $ $100-150$ upon approval of the credit card.
  • Credit Utilization: Each credit card comes with a credit limit. The higher the limit, the better utilization of your credit. So, at the end multiple credit cards help increasing your credit score.
  • Maximum Acceptance: More credit cards mean more acceptance while purchasing something. Although in USA, most shopowners accept most of the cards.

When should we have a new credit card and Which Ones?

Now, the point is, you should not get a few cards altogether. It will lower the credit score significantly and has no additional benifits. Let’s take a look at when should we have a new card-

The abovementioned cards have no annual fee and Amazon Prime Rewards Visa Signature Card has $0\%$ foreign transaction fees.

Another point is most cards offer first $12-15$ months of $0\%$ intro APR. So, whenever you feel that you have to spend a lot in the near future, it is time to have a new card so that in the next year, you do not have to pay extra for debts.

So far, I have the above-mentioned credit cards. You can have other credit cards from other banks as well. Just inquery for the best offers you can have from using those cards.

Always try to increase your Credit Scores

Creadit score ensures your capability to have a loan in the USA. Credit scores are updated on regular basis and depends on the following factors-

  • Payment History: Whether you are paying on time or not. It is the most important factor of all.
  • Credit Utilization: Utilizing available credits. Try to use less than $30\%$ of your available credit limit
  • Credit History Length: Age of your oldest credit card from today.
  • Credit Checks: Number of time you are applying for credit (e.g., having new credit cards). Mainly the hard queries affect the score.

There are usually two types of credit scores:

  1. Vantage Score (range: $501-990$)
  2. FICO Score (range: $300-850$)

In both cases, the higher the better. Higher scores allow to you to become eligible for better financing offers. Chase Bank usually use the vantage score where Discover uses the FICO Score. You can always check your score on your apps which is completely free to check.

So, that’s all for now. Feel free to let me know if I need to include something.

N.B. The links I have shared here are the referrel links that you can use for applying and getting the offers.

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