How Many Credit Cards Should You Have? You May Be Surprised at Dave Ramsey's Answer

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KEY POINTS

  • Dave Ramsey thinks consumers should avoid debt at all costs.
  • As such, he'll be the first to tell you that credit cards are bad news.
  • Credit cards are okay to use, but you should avoid collecting more than you can keep track of.


The financial expert has some strong opinions when it comes to credit card usage.

Credit cards can be a helpful financial tool that puts money in your pocket -- when managed well. Unfortunately, many consumers don't manage their credit cards well and wind up with debt on their hands. And since credit cards charge a lot of interest, that debt can be costly.

Now to be clear, some people wind up with credit card debt due to circumstances outside their control. If you lose your job and deplete your savings, you might have to run up a credit card tab to cover your essential bills until you're gainfully employed again.

But financial expert Dave Ramsey hates the idea of consumers landing in costly debt. And he's also convinced that credit card usage is a good way to land in that boat.

As such, if you were to ask Ramsey how many credit cards you should have, his answer would be an emphatic "zero." But whether it pays to heed his advice is a different story.

It's really okay to use credit cards

Ramsey's anti-credit card stance is meant to be helpful to consumers. By discouraging credit card usage, his goal is to help people steer clear of debt that costs them a lot of money via exorbitant interest payments. And so when he says not to use credit cards at all, he's not trying to be mean or overly harsh -- he's simply trying to keep you out of debt.

But for many people, not using credit cards at all just isn't realistic. Think about the last time you reserved a flight or booked a hotel room. Didn't that require a credit card on file?

Granted, Ramsey insists there are ways to work around situations like that, and that if you ask, you can often provide a debit card number instead. But that won't always work. And also, you might run into a situation where a given merchant doesn't accept cash or debit cards, but only accepts credit cards. That's an inconvenience you may not want to deal with.

Plus, credit cards really can be a useful tool. For one thing, they commonly reward consumers with cash back on purchases. And if you pay your bills on time and in full every month, they can help you build credit. As such, you don't have to listen to Ramsey and avoid getting a credit card altogether. You may, however, want to keep those applications to a minimum.

Be careful with the number of cards you have

There's no preset rule when it comes to the maximum number of credit cards you should have. For some people, it makes sense to have four different cards. For others, nine cards are manageable.

What you should do, therefore, is figure out how many different cards you need. If a single credit card suffices and offers you a high enough spending limit, stick to one card. If you need an everyday credit card plus a travel rewards card, open a second card.

The way you manage your credit card usage should also dictate how many cards it's good for you to have. One person might overspend on a single card, while you might manage your bills just fine with 10 cards in your wallet.

But no matter how many credit cards you decide to open, you should follow a few ground rules. First, space out your applications, ideally by six months, because each application will ding your credit score just a bit, and you don't want too many hits in short order.

Secondly, make sure to only charge expenses you can pay in full by the time they come due (not accounting for emergency situations outside your control). If you stick to this system, you may find that having several credit cards to your name works well -- even if Dave Ramsey would advise you otherwise.

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