6 Reasons To Keep More Than One Credit Card

Keeping a second credit card won’t lead to financial ruin, and may prove useful in several situations. Bankrate offers six reasons to stash away a spare card.

  • 1. Financial safety: A well-placed backup card can provide crucial flexibility if your wallet is stolen.
  • 2. Rewards: Want both cash back and miles, but don’t want to choose? Have one card for each.
  • 3. Credit score boost: Your credit score takes an initial hit after opening any new credit line, but by maintaining a reasonable debt to credit ratio over two credit lines, you can actually improve your score over time.
  • 4. Staggered bill paying: Ultra-savvy penny pinchers can arrange their cards “so one of his or her credit cards has a billing cycle that ends on the 10th of the month and another that ends on the 25th. If that you pay careful attention, you can use the first card for purchases shortly after the 10th and the second one for purchases shortly after the 25th, maximizing the amount of time in between the purchase and when the bill must be paid.”
  • 5. Easier bookkeeping: Save trouble during tax season by keeping all your business expenses neatly itemized on one card.
  • 6. Leverage: Bankrate argues that you can use the favorable terms on one card to leverage better terms from other lenders. Threatening to leave for greener pastures doesn’t require a second credit card. In fact, consumers can often receive better terms just by asking.

Bankrate argues in favor of “multiple” credit cards, but let’s not get carried away. Very few people need more than two cards. Regardless of how many cards you have, be sure to pay all of them off in full every single month.

Do you keep more than one card? Tell us how you use the spare in the comments.

6 good reasons to carry multiple credit cards [Bankrate]
(Photo by Jeff J Mitchell/Getty Images)

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  1. descend says:

    We have three: a joint Costco Amex, a joint Discover, and a joint Amazon Visa. We put as much as possible on the first two for the rewards but pay them off every month (the Costco Amex is the only CC they accept). The latter is used only at places that don’t accept Amex or Discover.

  2. GothamGal says:

    I have 4 cards, which is 1 too many. I have a Mastercard, a Visa and 2 AmEx. Each AmEx has different types of points. The Visa is a backup when the AmEx doesn’t work. The Mastercard is useless, but it’s the one that I’ve had the longest.

  3. Myotheralt says:

    Wow, all this time I thought Amex and American Express were different companies.

  4. joellevand says:

    I have three — the first I got after rebuilding my credit, which I keep open because of its age. The other two are for two different reasons. One currently has a very low APR and high limit. This is my emergency card — if I need to make a major purchase, I can put it on this card immediately and pay it off when the funds from my ING savings account (emergency fund) transfer into my checking account. The other card has a higher APR and lower limit, but I get cash back on purchases, so I use it for monthly billing (gym membership, internet access, NetFlix account, etc.) then pay in full each month so I get the rewards and don’t pay any interest. :)

  5. firefoxx66 says:

    I’ve got two, but they’re both Visas. Never run into trouble with a place accepting Visa’s, though.

  6. KingPsyz says:

    I have far too many, and for the most part I’ve been using them to increase my score and had them all at $0 every month… until about a month before my son was born and then they needed to be used for last minute things, meals at the hospital (had to stay for almost a week due to complications), ect. Than with time lost from work and a slow car buying season they became a life raft.

    I’m now working towards getting them back to $0, but it’s an easy thing to let get out of hand.

    Thankfully they’re fairly low balance cards so easy to pay off.

    Now we lock up all but one card at home until they’re paid off and then we’ll rotate the one left out for purchases until that one is paid off.

    My score has gone up 100 points in the last year so I won’t complain.

  7. QWGHLM says:

    I have two, a Mastercard and an Amex. I was fine with just one until my previous landlord told me one credit card wasn’t enough credit for the apartment and I’d need a guarantor…

    Amex accrues minimal cash back, so I use that one for pharmacies and groceries, and the MC for everything else.

  8. chiieddy says:

    I have way too many but don’t want to close them either because that can have a negative impact on your score as well. Instead, I have 4 I use regularly. 2 for personal purchases and 2 for joint purchases which I pay out of a separate budget. This way I can buy gifts for my husband and he doesn’t see the bill (not that he does any of the bills or budgets)

  9. ConnerC says:

    I have 2 – an AMEX Student Blue Card from when I first went into college (low limit, $500) that I use as needed and a Target Visa I got just under a year ago when I bought a Xbox360. The latter was for the 10% off, I paid the entire thing off and haven’t used it since… the card they mailed me still has the “Please activate” sticker on it and it’s sitting in my desk.

    I also have a VISA debt card from my credit union, which is what I tend to make any and all purchases with.

  10. We use an AmEx as our primary card, which basically necessitates keeping a MasterCard or Visa (MC for us) in reserve, since not everyone takes AmEx. It’s an AmEx Blue Cash. The MC is also a rewards card, but the Blue Cash is better (it was our main card before we fled for AmEx).

    I also have a Visa of my own, for the same reason as Chiieddy actually, so I can buy my husband presents without him seeing them on the bill. (Not that he, either, ever does bills or budget! :) But I almost never use it. My Visa is NOT a rewards card; it’s just the card I’ve had since college and I feel quite a bit of loyalty to the company (FNBO) since they’ve had great customer service for me for 10+ years.

    I generally think, especially if you travel a lot, it’s worthwhile to have two — in case someplace doesn’t take one, and so you have an emergency backup in case there’s a problem with one.

    I actually also have one that is my PARENTS’ card, which they keep special for all four of their children to have a copy in case of emergency, with a very high limit so we can cope with emergencies even overseas. I used it a couple times in college, but now I really only ever use it when my mom asks me to do some Christmas shopping for her at stores close to me, so we don’t have to sort out bills later. :) This is a fairly common practice around where I am, and sometimes I think it might be more of a safety net for the parents than the children. I don’t need their card anymore, but it makes THEM feel a lot better knowing they can rescue me with plastic in an emergency. :)

  11. LatherRinseRepeat says:

    Yup, #3 is why I have 4 cards. I actively use only one because it has a rewards program. The rest are sitting in my filing cabinet and haven’t been used in several years. For the inactive cards, I frequently get 0% APR deals for transferring balances. So it’s nice to have those as an option if I ever need it for an emergency.

  12. silver-spork says:

    My husband and I have separate United Mileage Plus Visa cards. This card has a high interest rate (17.49%) due to the mileage payout, but we pay it off every month.

    We also have a joint MC account with a low interest rate (6.9%). This would only be used in an extreme emergency for something we would not be able to pay off in one billing cycle. I don’t think we’ve used it for quite a while.

  13. ninabi says:

    We learned the hard way not to keep just one- years ago our credit union switched providers of our VISA card. The new cards came in the mail and the old ones expired- while we were on vacation out of the country.

  14. Clarkins says:

    We just have one. A low interest Visa–unfortunately maxed out. I got into trouble with a rewards card and had to cancel it and are trying to pay it off.
    Some of us can’t handle it and just need one for emergencies.

  15. DanielleS1986 says:

    Credit Card Zappers is a great service if you find yourself with interest charges or junk fees (late, overlimit) you want removed.

    I got in trouble with a high interest card and they helped me pay it off.

  16. xrodion says:

    Myself, I have two visas and I am very happy with them both. Since, I never had any problems at all with them yet.

  17. Scuba Steve says:

    I don’t have any. I’m sure I’m missing out on all sorts of credit enhancing opportunities.

  18. Merkin says:

    I have two, one with rewards and one with a very low interest rate. I use the rewards card for everything except for major purchases (over $500) and pay it off every month. I put major purchases on the low interest rate card in case I need to carry a balance for another billing cycle. I’ve only ever had to do that once, though, when I bought a new computer.

  19. aviationwiz says:

    Personally, I have 4. A US Bank Visa I’ve had since I was 16, and only use it at Carbiou Coffee anymore, as it gives no rewards. I’d cancel it, but it’s the card I’ve had the longest. An Amex Clear card, which is my primary card for the rewards and benefits that it offers. Then a Chase PerfectCard MasterCard that I use as my backup in case someone doesn’t take Amex, or at gas stations other than Costco (3% CashBack on gas.)

    Then there’s the Amex Blue card I just got, which I’ll be using it’s 0% for 12 months offer on Purchases to get a new MacBook Pro and probably a digital camera. I’ll be paying that one off before the 12 months is up though!

  20. ripple says:

    Plus you can max one out and then rotate the entire balance around the other 2 or 3 cards every month, which means you never pay interest or principal as long as you rotate the ENTIRE balance EVERY month.

  21. Teradoc says:

    I have 2 Visa card myself personally, not counting my Visa debit. One is through Capital One “What’s in my wallet?” Not that, I keep it in a desk cause its the least used. I then have a Visa that I use for everyday purchases that I pay off every month for the points.
    Though having 2 cards, I usually have the CapOne at $0, it has just under 900 now, after it helped me get back from Japan after Nova Corporation over there went bankrupt and I had no way of getting home.
    For some reason though….Chase bank does not get the idea I don’t want their credit cards – anyone know of a way of getting of their list?

  22. Go4EVA says:

    I have twenty-six. A good split between VISA, MC, and Amex, couple Discover, and mostly personal cards but a few business cards as well. The reason? Airline miles, hotels, bonuses, 0% offers, and a general feeling of superiority mixed with a constant fear that one will be stolen and I won’t notice.

  23. galatae says:

    I have one card with a high credit limit, which is barely used; one card that has access to MC Shopsafe, which is used on the internet alone as it generates random cc numbers; a department store MC because we needed appliances and the discount was too good to pass up; and an Amex for the points. All are paid off in full each month, so no finance charges. The trick is to NOT SPEND BEYOND YOUR MEANS. If we don’t have cash in the bank to cover a purchase, we don’t buy it.

    I avoid using cash whenever possible; I keep having to tell my bank that I don’t want a visa check card on my checking account. I may be mistaken, but I believe you have more purchase protection with your CC, and for us it’s easier to sort finances at the end of the month through the CC statements. I don’t see any point in having a visa check card with so many other credit options; plus the nightmare of dealing with the potential of it being stolen is too much to think about. It’s bad enough having 4 major CC’s to keep track of.

  24. nomatteus says:

    @ripple How do you go about rotating the balance every month? Taking out a cash advance and using that to pay the other one? I don’t think that’s a good method to use because don’t they charge interest on cash advances immediately?

    What other ways are there to rotate your balance? Balance transfers? Wouldn’t they catch on to that, and wouldn’t it look weird to the credit report people?

    Matt

  25. hals000 says:

    I have a question for anyone willing to answer it…Let’s say you have a few credit cards, both of which you pay at least 30% of the balance each month but do carry a little balance month-to-month, will your credit score be negatively affected because you did not pay it off entirely. That isn’t specifically my situation, I currently have no credit debt but was considering carrying some for a few months to free up some liquid cash. Thanks!
    I have an Amex Platinum and a Wells Fargo Visa, love the Amex, the Visa is pretty weak sauce.

  26. kimsama says:

    #5 is a really important one (though they’re all good). I wish I’d known how important it was a long time ago, frankly. Tax season is a great time to bring this stuff up!

  27. bdslack says:

    I have no credit cards, but I do have $50,000 in cash in a money market account. Let me put it to you this way:

    Most people pay 15%-20% in interest on credit cards. I make 5%-12% in interest. So I give myself a 20%-32% raise over the people using credit cards. It was a total pain in the ass scraping together 50K in cash, but once I did it and have my “credit card” cash bank account, I also don’t drop money on crap like most people do (Starbucks, etc.).

    I can’t honestly believe this is “advice”.

    # Financial safety: – I have 50K in cash sitting waiting. I don’t know how the hell credit is considered “safe” with all the universal default rules etc.

    # 2. Rewards: – I am rewarded by the fact that I don’t have a stack of bills rolling in every month.

    # 3. Credit score boost: – I don’t use credit so I don’t really care what my score is.

    # 4. Staggered bill paying: – If you need to “stagger” your bills, I think you are buying too much crap that you should just give up. I don’t think credit will help you there.

    # 5. Easier bookkeeping: – Cash is easy. Credit cards are not.

    # 6. Leverage: – ??? What? Who the hell is Bankrate? So I need many cards to get more or better cards? No thanks.

  28. Go4EVA says:

    @HALS000
    The question isn’t how much of the balance you pay each month. The question is how much of the total credit line do you let revolve each month (i.e., $1000 credit line, you’re using $400, thats 40%).

    The higher the percentage is, the lower your score will go. As long as you stay below 50%, you’re pretty safe and your score won’t be too bad. Between 50 and 70%, your score will suffer a little. 70 to 90% is the next tier, and anything above 90% will tank your score quite a bit and may result in adverse reactions from credit issuers such as credit line reductions.

  29. nrwfos says:

    I closed my only credit card after a subscription service kept charging me via the card after being told several times to cancel. The problem became that they would charge when my balance was zero and I wouldn’t catch it until it was late. I was sorry to close it because it was the one I’d had for 25 years. It had been bought or merged at least 3 times and I didn’t think the years I’d had the account mattered to them because I certainly wasn’t treated very well. Even though the number on it changed those times – the owners would continue to accept charges on it that I didn’t authorize, and I’d call them about it and they’d take it off, but then recharge me with it again a couple of months later. Now I sort of wish I hadn’t closed it until I could get another one, but I couldn’t be sure they wouldn’t continue to charge me and I wouldn’t know. Now I guess I’m SOL about a card we have my husband’s cards, but none are mine alone now. I no longer hold a job, so I’m cooked.

  30. Ailu says:

    @bdslack: Thank you. I can’t believe this is considered “advice” either.

  31. nrwfos says:

    @bdslack:
    So you will never need to rent a car, buy plane tickets, get a new mortgage, rent a new apartment, or go to the hospital. Lots of things require a credit card. I don’t think anyone needs all that many, but after watching my mom who is a diehard credit card hater suffer with trying to buy things online without a credit card or try to travel or cope with medical bills (don’t need to pay with it, but it helps when it comes time to go to the emergency room), I’ve learned it is a very useful tool.

  32. jpp123 says:

    My Citi visa just got compromised (they called me – who on earth is “Sixex river land company” anyway and why did they charge $3.67 to my card?)

    Anyway Citi was very quick to catch it and overnighted me a new card. Still having a second card (Capital one because they don’t charge a fee for overseas transaction) meant that I could go on with my life as if nothing had happened (well apart from the three hours I spent updating all the places that bill to my card).

    I understand the comments about not having a card – I treat mine strictly as debit cards – pay them off every month and never carry a balance. They probably hate me. Still I get miles which I actually use (been to europe first class) and it doesn’t cost me much to have them (citi waves the fee because I have meet minimum balance requirements on the banking side and because I called them up and asked them to).

  33. bdslack says:

    I will knock these out one at a time:

    So you will never need to rent a car – Visa ATM card. Never had a problem with Alamo, Budget, Hertz, Avis etc. Hawaii, London, Mexico, California all in the last two years – no issues.

    buy plane tickets – ATM card. No issues at all.

    get a new mortgage – There is only one thing that can get you a great rate – 25-30% down payment. If you can’t get that together – don’t buy that big of a house. Money talks FICO scores walk. You show a W2 and a bank statement to a bank and they will give you a great rate. A FICO score only PRE Qualifies you.

    rent a new apartment – Rent is a true waste of money. Plus a Money market statement with 50K in it says more than a FICO score.

    or go to the hospital. – I work in hospitals. even if you don’t have medical coverage you can go to the emergency room WITHOUT a credit card and get medical treatment. No need for credit.

    Lots of things require a credit card. – Sorry not true 100%.

    I don’t think anyone needs all that many, – Nobody needs ANY – this is just what you are told.

    It’s not a tool – it is a trap.

  34. TWSS says:

    There’s nothing at all wrong with having a credit card – or even several credit cards – as long as you pay them off every month.

    I don’t know how anyone can function without one nowadays. You need one to rent a car or a hotel room. You need one to shop online. Unless you’re planning to hide out in your hermit shack, only venturing out to the local stores for food, I would think that a credit card makes your life a helluva lot easier.

    FTR, I have four (joint account, individual account X 2, small business account), pay them off in full every month, and have accumulated at least eight round-trip airline tickets and hundreds of dollars in rewards over the last several years from the credit card issuers.

  35. TWSS says:

    You’re absolutely wrong about mortgages, but that doesn’t really need to be said.

    The problem with ATM (debit) cards is that in case of fraud, the money comes straight out of your checking or savings account. When my wallet was stolen overseas a few years ago, the thieves managed to rack up over $800 in fraudulent charges before I could get to a phone and cancel my card. Had that been done with a debit card, my mortgage payment debited from my account two days later would have put me into overdraft while the bank dealt with crediting my account. Yeah, had that happened, I would have raised a ruckus and gotten any overdraft charges reversed, but it’s nice not to have to worry.

  36. solidstate42 says:

    I currently carry 3 cards; AAA Visa because it has an extremely low rate, Chase Rewards Visa because I get cash back each month, Hilton Honors Amex because I accumulate points towards lodging for vacations. I’ve worked for banking companies and if you play the game right managing credit can have benefits.

  37. Go4EVA says:

    @BDSLACK:

    1) Financial safety: How about having $50K in the bank, using a credit card that gets me 2% cash back, and then paying the credit card in full every month? Looks like I just got a 2% raise over you. And I’m safer because if someone steals my card and rings up $2K worth of charges, I don’t have to fight to get my money back, since my money didn’t go anywhere.

    2) Rewards: The aforementioned 2%, but also 5% on groceries and gas, travel rewards, etc. Granted, as long as you are not paying interest, which last time I checked, is not in the terms and conditions.

    3) You’re wrong about the mortgage. They pull your credit to decide if you are worth giving a “free” $300 cell phone if you go to T-Mobile, but you think that rolling in with $50K cash to put toward a $100K+ home is going to sway them from checking your credit? Sorry, but you need to read up on how mortgage qualifying works.

    4) I agree with you there. If you need to stagger your payments, you’re living month to month and thats never a good thing.

    5) I have 26 credit cards, about 6 of which either have a running balance or I use on a regular basis. And it couldn’t be easier to book keep. Using any online account aggregation tool like Yodlee, I can see all my transactions, most of which are categorized automatically, and see where all my money is coming from or going to.

    6) This one is technically true but again, shouldn’t really matter if you aren’t carrying a balance. Although I’ve never explicitly leveraged one card against another, some issuers *do* match the credit limits of other cards on your credit report when you apply for a new account, so I suppose thats helpful if you are looking for higher credit lines.

  38. mac-phisto says:

    @TWSS: or your mortgage would have bounced, causing you a hefty late fee.

    @bdslack: there are many places that refuse to take debit cards for a deposit or charge extra to use them – hertz or avis (i forget which) once charged me an extra $10 for reserving on a debit. you’re right that no one needs a credit card, but it’s a tool that can be of great benefit to those that use it wisely. my mom has all her bills wash thru a rewards card (including the mortgage) & uses the miles for trips every year. saves her a few hundred bucks/trip & lets her get away more often. her money also stays in the bank like yours (except she gets to keep it there 20 days longer than you thanks to grace periods).

  39. nrwfos says:

    @bdslack: And how do you buy online? PayPal is okay, but I don’t trust them with bank account – so I would need to have a separate small checking account just for them. I know you can order from Amazon using your bank account (checking), but you lose the disputed charge for bad items and you’re out the money. I prefer to buy online and it’s much easier with a credit card. I don’t like debit cards. They can get me in more trouble than a credit card would – especially if the account info was stolen.

  40. nrwfos says:

    @bdslack: I live in an area that has no local hospital. If it’s an emergency (not life-threatening), we go to the Urgent Care place and they DO want credit card numbers.

    Renting a hotel or motel room (making reservations) they will definitely require a credit card (it’s their insurance in case you damage or have more charges than just the room).

    YOU may not need to rent an apartment, need to get a mortgage, or buy a new car (paying cash up front), but plenty of people do. You are lucky if you are able to go without a credit card, but few people can pay in full everything in cash or by bank account – especially when emergencies come up).

  41. SadSam says:

    I cancelled my BOA credit card which used to be a Fleet card that I had for years. My FICO score remained above 800.

    I ‘survived’ witout a credit card for 6 mos. I had not trouble renting a car, reserving a hotel room, buying plane tickets, etc. I used my Visa branded debit card. I never experienced any extra charges or ‘holds’.

    I did recently obtain a new Capital One credit card but I only use it for biz travel.

  42. gew95001 says:

    Discover has recently caused me some problems. Between the gutting of the Rewards program and their bizarre reaction to possibly compromised accounts (you have to re-register online, losing all access to previous statements) it’s becoming a chore to do business with them. FYI – recently a number of their accounts were “possibly compromised”, and every one of those people lost access to all previous online data.

  43. bdslack says:

    1) Financial safety: How about having $50K in the bank, using a credit card that gets me 2% cash back, and then paying the credit card in full every month? Looks like I just got a 2% raise over you. And I’m safer because if someone steals my card and rings up $2K worth of charges, I don’t have to fight to get my money back, since my money didn’t go anywhere.

    A. Understood, and I agree. BUT what they don’t tell you is that they put out these “rewards” to get you into their net. One false move – or medical emergency, or job loss, or house fire, or car accident, and they got ya. Up shoots your rate to 32% overnight, and then you are really screwed. To get my 2% I always run my ATM as “credit” and USAA gives me the same rebate back. About the theft of an ATM card – you are covered over $500, and it takes weeks to get it turned around, but I feel safer knowing I don’t use cards vs. the one in a thousand pick pocket.

    2) Rewards: The aforementioned 2%, but also 5% on groceries and gas, travel rewards, etc. Granted, as long as you are not paying interest, which last time I checked, is not in the terms and condition.
    A. I can choose to invest in other areas with a much better return than 12%, and my risk goes up – but my risk is still lower than playing with credit cards.

    3) You’re wrong about the mortgage. They pull your credit to decide if you are worth giving a “free” $300 cell phone if you go to T-Mobile, but you think that rolling in with $50K cash to put toward a $100K+ home is going to sway them from checking your credit? Sorry, but you need to read up on how mortgage qualifying works.
    A. I live in a very large house on a lake. They did pull my credit as it is a part of the process. BUT I had 6-7 lenders trying to get my business when I bought. Online lenders use a FICO score. Manual underwriting is much safer and you get much better rates. Besides, look around at the current housing crisis. Any chump can get a .5M house with no money down. You don’t need a 3 inch stack of plastic cards to get a house.

    4) I agree with you there. If you need to stagger your payments, you’re living month to month and thats never a good thing.

    A. I’m trying to figure out why it is “advice” all of a sudden.

    5) I have 26 credit cards, about 6 of which either have a running balance or I use on a regular basis. And it couldn’t be easier to book keep. Using any online account aggregation tool like Yodlee, I can see all my transactions, most of which are categorized automatically, and see where all my money is coming from or going to.

    A. You have 26, but only use 6 and you are afraid of someone stealing your line of credit? I take cash with me everywhere. About 1-2K in my pocket. It is super easy. I take it out and hand it to the cashier. I use mint.com. I handles the same thing online. I don’t know how 1 balance sheet compares to 26, but I will take the one.

    6) This one is technically true but again, shouldn’t really matter if you aren’t carrying a balance. Although I’ve never explicitly leveraged one card against another, some issuers *do* match the credit limits of other cards on your credit report when you apply for a new account, so I suppose thats helpful if you are looking for higher credit lines.
    A. Again I don’t understand it. But I don’t use it either.

    Don’t get me wrong people – I have played the game. know how it is. BUT I decided that I would try it the other way for way few years. I decided if I didn’t like it I could always go back into debt with credit cards, but it does work – the sky didn’t fall down. I wasn’t turned away at the rental car place. and I don’t use credit ever.

  44. bdslack says:

    @mac-phisto: @nrwfos:

    If you are turned away for Medical Care without a credit card then you can sue them and end up owning a nice urgent care facility of your own. It is illegal in all 50 states. No questions asked.

    I am more than sure that they WANT a credit card, but they will provide you service without one.

    Don’t let them scare you into debt for these reasons. Plus my ATM card is a VISA card. You can run it just like any other.

  45. bdslack says:

    @nrwfos:

    Honestly I use my Visa ATM card online all the time. Almost every day. With no issues.

    I will tell you a story I found funny:

    Land’s End takes a ton of phone calls for orders and very little internet traffic. Most of their customers are older and don’t feel “safe” ordering online. So they call into the California prison that Lands End employs as their call center operators and they give the prisoner their credit card number and HE TYPES IT INTO THE INTERNET SITE TO PLACE THEIR ORDER.

    Silly right? Like I said, I keep between 1-3K in my checking account. If something happens USAA will cover me over the first $500. I am 35 and nothing has ever happened – ever.

    I sleep better at night with no credit cards than worrying about online bandits.

  46. brokeincollege says:

    @myotheralt: They kind of are. American Stock Exchange vs. American Express. Both capital/lowercase variations of Amex for short. Sometimes the former is referred to as AMEX while the latter is referred to as Amex or AmEx.

    I have 4 cards, 2 of which I stopped using. I have a BoA visa, a starbucks duetto visa, a discover student card and my latest, American Express Blue for Students with $1,000/$1,600/$500/$2,200 credit lines, respectively. I cut up my BoA visa and I’m about to retire my discover card once I get the requisite $20 cash back to redeem it (I have $12.70 or something). None have annual fees, thank god. Honestly, I don’t pay attention to interest because it gets paid off in full anyways. By the time I graduate, I’ll have no student loans, a good $2k-$3k in my name, and a credit score upwards of 700. By the time I graduate from law school, again, no debt (it’s taken care of, it’s a don’t ask, don’t tell kind of thing), and a FICO score that should be close to 750.

    Plus I get reward points on my Amex through membership rewards, starbucks card credits through my duetto visa, and cashback through my discovercard. The one card I cut up had no rewards.

  47. nrwfos says:

    @bdslack: I’m not saying you (or anyone) should run out and get themselves in debt. I have the same regard for debit cards and ATM cards that you have for credit cards. I don’t want them. I have only 2 credit cards that are rarely used. I pay with actual cash, physical dollar bills. Of course this means dealing with a bank on a weekly basis. My ongoing bills are paid via the bank automated system. The purchases I make online are paid with a credit card but then paid off in full. But there are 2 stories that you might want to read:

    [consumerist.com]

    and

    [redtape.msnbc.com]

    They may be scare stories – but one can never discount the motives of a service provider. There is a cash phobia out there. And a credit card abusive system. I don’t use ATM’s because I don’t like giving my money to get my money. And I don’t use debit cards because of several instances in the past where the paid recipient took liberties with the card that ended up costing me money and trouble with my bank.

    If nothing else this thread points out that there are no one ideal way to use payments in any form.

  48. bdslack says:

    @nrwfos:
    I think there is a lot of value in what you are saying.

    What I find sad is that 90% of Americans think that they can’t “live” without a credit card. That there are commercials on TV where the party stops in the stores when someone pulls out a checkbook or a wad of bills.

    And what really gets me is that people think that they are safe and making solid money by trying to get “miles” or “rebates” on credit card companies.

    If you talk to the rich people in America, none of them will tell you they got their money playing the credit card game. Most of them don’t have cards at all.

    The security that credit card companies offer is their ability to “bully” stores into forgiving fraud debts. If a Target store took 15,000 on a stolen Visa card – Visa calls them up and tells them “tough luck kid, that just cost you 15K”. Otherwise they will pull their Visa machines from the store the next week. The ATM banks don’t have that power, but they do, will, and can get your money back – it just takes longer.

    I did have a tough time paying $2 every time I went to pull a $20 out of the machine, but now my bank pays me back for ATM fees up to $12 a month (they have no locations). So it works very well overall.

    The really sad thing is that kids go to college and get 3-4 cards when they step out of the dorm, and for the rest of their life they live in debt. It is a business plan from CHASE, and BOA to keep America in debt. Much like the Federal Government. We borrow Billions from China to fund our country, and now we are going to get an additional 800.00 back in tax refunds?

    I just don’t see where it is ever going to end. The housing bubble is going to shift over to credit card debt in a very short time as people try and “float” out of this downturn. And then we are really going to be in for it.

  49. Rusted says:

    @bdslack: Amen.

    No credit card and/or consumer debt, no mortgage,and no car payment. No need for a steady job, just steady customers….

  50. sventurata says:

    @bdslack: First of all, I am staring in disbelief and admiration at the repeated “$50K in savings” assertions… good work! However, some of us just don’t have that liquidity, y’know. “[I]t’s taken care of, it’s a don’t ask, don’t tell kind of thing)” = good for you, but do you seriously think most students can tap into a similar financial arrangement? I’m sure you mean well, but it comes off as a tad… condescending.

    Regarding medical care — what about non-urgent, but nonetheless important, medical expenses like wisdom teeth removal, etc?

    I’m 22, I have two credit cards (one I use, one I don’t) and I have not paid a cent in interest fees. Strategic management has accrued me reasonable rewards and demonstrated that I can handle long-term debt, which I actually did need to complete my university education — no sugar mama in my kitchen, alas.

    And, personally, if I were conducting a large credit transaction (car, house) with someone who claimed to have $50K and no credit history (old expired cards won’t do much for your FICO ten years down the road, I’d be skeptical about how those funds were legally (no pun intended!) obtained. Money laundering springs to mind as a less admirable reason to have all that dough sitting in money market. Just my two cents. But please note that I agree with your MAIN point 100% — credit dependency is not an ideal way of life. That’s not always a feasible option, though, so better to advocate credit awareness than posit impossible (for most) scenarios.

  51. EBounding says:

    I have two cards that offer rewards: One gives 2% on gas, 1% all else, and the other gives 5% cash back on gas for the first $100. 1% after $100.

    I never charge more than the cash I have in my checking account. So even if I’m maimed and can’t work, I can still pay off my card. It’s so easy to check nowadays. It takes less than a minute online to do.

    Time’s valuable to me. That’s why I see credit cards as a tool to save time and nothing more. But once you start needing them to give you “purchasing flexibility”, that’s when you’re heading into dangerous territory.

    The way I see it, if you’re lousy with cash, you’re going to be really lousy with credit. But if you’re responsible, credit cards can save you a lot of time and hassle.

  52. czarandy says:

    I’m 21, and I have about 12 credit cards. I only use 4 of them regularly. That allows me to maximize my cash back. I get probably around 4% total on all my purchases:

    6% on gas, groceries, drugstores (actually 12% for the current year)
    5% on restaurants, books, music
    3.75% on bills (electricity, internet)
    2% on everything else

    Also I have about $20k in 0% debt, on which I earn interest.

  53. rolla says:

    i have 4-5, and only use one. Cant cancel any b/c i have long histories with all.

  54. madanthony says:

    I have four cards right now:

    -Amex Blue Cash, which I use for almost eveything – great rewards, great customer service.

    -Chase Freedom Visa – use it primarily for fast food and at a grocery store I frequent that doesn’t take Amex (3% back on those two catagories)

    -Discover Driver’s Advantage – used to give really good gas cash back, but recently changed the rewards structure. I use it for $100 worth of gas every month and that’s it.

    -a Citibank mastercard that I never use, I just keep it because I’ve had it since I was 18 and it’s my oldest account.

  55. meeroom says:

    I have an American Express that my husband and I put EVERYTHING on, groceries, gas, a ton of reimbursed business expenses, you name it. It totals anywhere between $1000 and $5000 a month. We pay it off in full every month. We’ve used their buyer protection plan on a defective Xbox and made $500.00 this year with the 1% reward into a high yield savings account program on this card. So, bdslack, congratulations on your money market fund, but I have my savings in higher yield investments, and I’m enjoying the $500.00 per year I earn on my Amex.
    And I had 35% to put down on my house, Captain Condescending.

  56. Go4EVA says:

    @BDSlack:

    This is going to drop off the first page, so there is really no reason to continue debating about this. I completely disagree with you and thats OK. Different strokes for different folks.

    That being said, an additional benefit I didn’t think of: With the airline miles accrued with using my card for all my home remodel purchases this year, I was able to get a round trip ticket to Europe for myself and my fiancee. I can’t complain about that.

  57. quagmire0 says:

    I’ve got about 6 cards, and none of them carries a balance. It’s mostly because I sign up for rewards cards and then the bank changes the rewards system after a while – so, I go find another card with better rewards. :P

  58. bdslack says:

    @Mrs. Basil E. Frankweiler: You know I didn’t really mean to come off like that. Think of it like TIVO. I just hit the “pause” button for about a year and saved up money. Once that was done, I had more in cash than any credit card would ever give me in credit. I live in the past while most people live 2-3 months in the future.

    As a family we do very well, but it is because we don’t use debt. It is difficult to explain to anyone that has not done without credit. I have seen the other side of the fence, but many people have not seen mine.

    So to each it’s own, and the grass is always greener. I just can’t imagine the loyalty people express to an industry that destroys countless lives everyday. Cheers to all the people that pay off their cards every month, you are the top 1% of the credit industry. There is a great movie called “Maxed Out” where credit card executives refer to you as “deadbeat customers”.

    It is such a heated topic, when friends and coworkers find out that we don’t carry any debt or credit cards we tell them that it is a religious thing. It is much easier and we don’t need to hear the same stories told here on this post, “are you a hermit”, “how do you rent a car”, “what about all the miles”, etc, etc,. I even put a freeze on our FICO accounts so that they would stop sending offers in the mail altogether.

    It is amusing how a simple credit card discussion gets people so heated, like you are discussing their own personal money when it is in fact Visa’s money. Anyhow, I’m a very small percentage of the population in America. My apologies if I offended anyone and my comment about a 35% down payment was in regards to the entire world demanding lengthy credit card histories to purchase a house, not as a finger wag to whatever your situation is. You simply need MONEY and an INCOME to buy a house, not lengthy credit card histories.

  59. nrwfos says:

    @bdslack: I’m not offended. I just think that credit cards and credit history is an evil necessity. The one thing about me and credit cards is that I don’t want “rewards” I would want a cheaper interest rate in case something happened (like medical bills, etc.) and I couldn’t pay the full balance off at the end of the cycle. I really don’t have any use for their rewards. I have a medical condition that prevents me from flying.

  60. machete_bear says:

    I have a money market account like my good friend bdslack up there, earning a steady 4%, and a well-balanced checking account with a debit card for emergencies. I’ve yet to run into any financial trouble.

  61. rustyni says:

    I have three credit cards. A Capital One that I obtained at the age of 18, with a low limit and high APR, and two department stores, one with a high limit and high APR and one with a high limit and low APR. I’m one of those people that does the minimum payment each month until I can scrape enough cash together to pay them in full. Bad, bad, I know. But I’m learning, and by the end of summer all of my three should be paid off. :D

    Oh well. Can’t complain when you’re able to buy your own house at the age of 22.

  62. anatak says:

    Ahh, Bankrate. Fine purveyors of financial ineptitude.

    # 1. Financial safety: A well-placed backup card can provide crucial flexibility if your wallet is stolen.
    Well placed cash can’t do the same?

    # 2. Rewards: Want both cash back and miles, but don’t want to choose? Have one card for each.
    Yes, rewards – that great incentive to spend, spend spend, spend….

    # 3. Credit score boost: Your credit score takes an initial hit after opening any new credit line, but by maintaining a reasonable debt to credit ratio over two credit lines, you can actually improve your score over time.
    What a great beacon of of personal finance advice to implore readers to to go into debt to boost an unneeded debt-worthiness score. Nice work guys.

    # 4. Staggered bill paying: Ultra-savvy penny pinchers can arrange their cards “so one of his or her credit cards has a billing cycle that ends on the 10th of the month and another that ends on the 25th. If that you pay careful attention, you can use the first card for purchases shortly after the 10th and the second one for purchases shortly after the 25th, maximizing the amount of time in between the purchase and when the bill must be paid.”
    Why are we maximizing the amount of time in between the purchase and when the bill must be paid? It wouldn’t be because we’re spending money we don’t have, is it?

    # 5. Easier bookkeeping: Save trouble during tax season by keeping all your business expenses neatly itemized on one card.
    Separate checkbooks or debit cards achieve the same goal.

    # 6. Leverage: Bankrate argues that you can use the favorable terms on one card to leverage better terms from other lenders. Threatening to leave for greener pastures doesn’t require a second credit card. In fact, consumers can often receive better terms just by asking.
    So this is or is not a 6th reason? Looks like a no to me.

    So what’s next, Bankrate? 12 good ways to line your local bank’s pockets? 34 reasons why sub-prime is A-OK!?