Jose Luis Pelaez Inc | Digitalvision | Getty ImagesWhy having a credit card can be beneficialHaving a credit card — and using it responsibly — is a good way to start building strong credit, said Ted Rossman, senior industry analyst at CreditCards.com.Establishing good credit is “essential” for qualifying for loans such as a mortgage or auto loan, and for other things such as buying a cell phone, renting a car or getting a job, the Consumer Federation of America notes. Strong credit also helps consumers qualify for lower borrowing costs.Not everyone uses a credit card in a financially optimal way, however. Eighty-two percent of American adults had a credit card in 2022, according to the U.S. Federal Reserve. About half of them carried balances from month to month at least once in the prior year. Since credit cards often carry high interest rates, carrying a balance (i.e., not paying off a card in full each month) can add significantly to household costs. Rossman recommends first-time cardholders get a card without annual fees and with zero-interest, at first, at least, and that they pay their balance in full and on time each month. It is important to make sure the interest rate will be relatively low after the initial no-interest offer runs its course.There are virtues to sticking with just one card, experts said.Among the biggest: There’s a simplicity to keeping track of just one set of due dates and other key details such as card benefits, said Bruce McClary, senior vice president at the National Foundation for Credit Counseling.”If you’re limiting yourself to one card, it helps simplify the process of debt management,” McClary said.Benefits to having more than one credit cardHowever, there can be drawbacks to having just one credit card. For one, not all businesses will necessarily accept your card brand.”In those cases, in might make sense to have two different card types: Visa and Mastercard, for example,” McClary said.Similarly, a consumer who operates a business can separate their personal and business expenses by using two cards, he added.Consumers can prioritize a solid all-around card as a primary one, experts said. A good “foundation” for users may be a card with no annual fee that pays 2% cash back on all purchases, for example, Rossman said.I would say two cards is optimum … and three would be maximum to keep finances simple.Cathy Curtisfounder and CEO of Curtis Financial PlanningA second would likely be based on how consumers shop and how various cards divvy up rewards and benefits, experts said. For example, frequent travelers may benefit from a card geared toward travel rewards and co …
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[mwai_chat context=”Let’s have a discussion about this article:nnJose Luis Pelaez Inc | Digitalvision | Getty ImagesWhy having a credit card can be beneficialHaving a credit card — and using it responsibly — is a good way to start building strong credit, said Ted Rossman, senior industry analyst at CreditCards.com.Establishing good credit is “essential” for qualifying for loans such as a mortgage or auto loan, and for other things such as buying a cell phone, renting a car or getting a job, the Consumer Federation of America notes. Strong credit also helps consumers qualify for lower borrowing costs.Not everyone uses a credit card in a financially optimal way, however. Eighty-two percent of American adults had a credit card in 2022, according to the U.S. Federal Reserve. About half of them carried balances from month to month at least once in the prior year. Since credit cards often carry high interest rates, carrying a balance (i.e., not paying off a card in full each month) can add significantly to household costs. Rossman recommends first-time cardholders get a card without annual fees and with zero-interest, at first, at least, and that they pay their balance in full and on time each month. It is important to make sure the interest rate will be relatively low after the initial no-interest offer runs its course.There are virtues to sticking with just one card, experts said.Among the biggest: There’s a simplicity to keeping track of just one set of due dates and other key details such as card benefits, said Bruce McClary, senior vice president at the National Foundation for Credit Counseling.”If you’re limiting yourself to one card, it helps simplify the process of debt management,” McClary said.Benefits to having more than one credit cardHowever, there can be drawbacks to having just one credit card. For one, not all businesses will necessarily accept your card brand.”In those cases, in might make sense to have two different card types: Visa and Mastercard, for example,” McClary said.Similarly, a consumer who operates a business can separate their personal and business expenses by using two cards, he added.Consumers can prioritize a solid all-around card as a primary one, experts said. A good “foundation” for users may be a card with no annual fee that pays 2% cash back on all purchases, for example, Rossman said.I would say two cards is optimum … and three would be maximum to keep finances simple.Cathy Curtisfounder and CEO of Curtis Financial PlanningA second would likely be based on how consumers shop and how various cards divvy up rewards and benefits, experts said. For example, frequent travelers may benefit from a card geared toward travel rewards and co …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
