Too Many Credit Cards or Too Few?

In a perfect world, no one would need to use credit cards, but a perfect world is so far away that you have already maxed out one credit card with grocery purchases and other expenses that no one would consider luxuries, and now you are running up the balance on at least one other card. If you have more than one credit card, what should you do? Is it better to make most of your purchases on one card, perhaps the one with the lowest interest rate or the most available credit, or is it better to spread out your credit card debt as evenly as possible over multiple cards? If you need more credit because you are close to maxing out all your cards, is it really as simple as just opening a new credit card account? From the perspective of your credit score, it doesn’t really matter. The credit reporting bureaus look at your total credit-to-debt ratio, not how much debt you have run up with each creditor. Different credit card issuers have varying rules regarding the frequency of account openings. If you owe a balance on multiple credit cards but still feel the need for more, consider contacting an Oakland lawsuit, collections, and creditor harassment lawyer.

Multiple Credit Cards are Better Than Credit Cycling

You might assume that, because you have only one credit card, you are avoiding the worst credit card debt problems. It is possible to get into plenty of trouble with one credit card, though. Specifically, credit card companies get suspicious if you max out your card, pay more than the minimum payment, and then max it out again in the same billing cycle. If this happens once, the credit card companies assume that you did not mean to do it; it was an accident or a financial emergency. If it happens in multiple billing cycles, especially if they are consecutive, then it is credit cycling.

The credit card companies might assume that you are doing it to get a maximum number of reward points, in which case, they might just withhold your reward points. They might also assume that the closely spaced purchases are for money laundering purposes, in which case, they can close your account and report your transactions to law enforcement.

How Often Can You Open New Credit Cards?

There is no limit to the number of credit cards a person can have. Each credit card issuer sets its own rules about how often you can open a new card. Some let you open a new card every six months or every year. Others allow a maximum of five cards in two years. Some follow the 2/3/4 rule, where you can open two cards in one month, a third within one year, and a fourth card within two years. Opening a new card helps your credit, but the hard pull to apply for one negatively affects your credit score.

Contact the Law Office of Melanie Tavare About Balancing Multiple Credit Cards

A debt relief lawyer can help you if you are trying to keep up with the payments on multiple credit cards. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a case evaluation.