Iowa’s consumer-protection office has a warning about credit cards. While it’s handy to have plastic when you’re traveling or an emergency comes up, Debra Moore in the Iowa Attorney General’s office says you should limit its use. The recommendation’s to have only one or two cards — for emergencies, to rent a car or hotel room, and perhaps a card for a store where you shop a lot. “Other than that, we really don’t need a lot of different cards,” she says.
Moore says you shouldn’t accept every invitation that comes in the mail to apply for a new card. She points out they show up on your credit reports, and if you’ve gotten all the cards you can, it signals a potential lender that your credit’s extended to its limit, which can hurt your chance of getting a home or car loan.
Moore says “It’s really wise to first decide if you really need another card.” Each card can mean one more monthly minimum payment you have to make, and a temptation to overspend. There are always extra charges if you’re late with a payment, and not only will your interest go up, she says it may also go up on other cards you hold, as the different companies are tracking each others’ information. She says tempting introductory rates often give way to higher interest in a short time and many of those offers carry hidden fees.