Credit cards

Be careful not to have too many credit cards

Americans have opened a record number of new credit card accounts as they grapple with the highest inflation in 40 years.

According to credit reporting agency Equifax, 11.5 million new bank credit cards were issued in February 2022. This represents a 31.4% increase over the previous year.

The Federal Reserve says revolving credit — meaning credit cards and lines of credit — rose nearly 20% from a year earlier to $1.1 trillion.

This is quite understandable.

Millions of American households now live paycheck to paycheck, and putting purchases on plastic may be the only way to make ends meet.

But please, please be careful.

Having a credit card balance (or balances) that are too high can put you at greater risk to lenders. This in turn can drive up your interest rates or even lower your credit score.

My advice: limit yourself to no more than three credit cards. This will maintain a more creditworthy profile for banks and other financial companies.

Also be very careful with store cards. They often seem attractive due to the discounts offered for using them.

But store cards usually come with higher interest rates. And, again, the more plastic in your pocket, the more nervous creditors can become about your ability to repay balances.

If there’s a retailer you particularly like and use more frequently than others, use their brand card if you must.

Overall, though, you’re better off skipping the store cards and ignoring all requests for extra plastic.