What are the downsides of having several Credit Cards?

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Aug

What are the downsides of having several Credit Cards?

While it may sound tempting to have a bunch of credit cards in your wallet, you’ll want to be cautious with that idea. You’ve probably received mailings offering instant approval credit cards or easy to get credit cards or perhaps even credit cards for poor credit, whether or not your credit is poor. However, you need to think about what having all those cards would do to your credit rating?

Instant approval credit cards still require a credit check. Every time a potential lender requests your credit history, your credit scoring can drop slightly. Often, you’ll trade the “instant” approval process for less than perfect terms on the card. The lender may be betting that you’re in enough of a hurry that you won’t notice the high interest rate or hefty annual fee. Even with instant approval credit cards, you still need to examine the terms of the card to avoid getting stung later.

Easy to get credit cards can lull you into a false sense of ease. Their applications may be shorter than you’ve seen or the entire process might be handled over the telephone. You don’t have to fill out a thing, but that can be dangerous. You won’t see the terms, and the person on the other end of the phone may be paid on the basis of how many people are signed up. Also, if you’re not careful, easy to get credit cards can become difficult to pay several months down the line.

These cards are often billed as credit cards for poor credit, but remember that even with poor credit you have choices. Secured credit cards, where you put money on deposit, can be a good choice, as they often have lower interest rates and fees than other credit cards for poor credit.

Choose the cards you want carefully. You don’t need an entire wallet full of them, just the ones that will do the best job for you.