Many people in Texas have around three or four credit cards. A study by The Ascent found that, on average, millennials have three credit cards while baby boomers and Gen Xers have four. In all age groups, 1 in 10 people said they had six or more credit cards. There are advantages and disadvantages to having multiple credit cards.
Since payment history is an important factor in credit scores, having many credit cards increases the opportunity to develop a strong history. Having more cards also means that people use less of their available credit, and this also contributes to strong credit scores. More credit cards could mean that more funds are available in case of emergencies. Finally, having more credit cards gives more access to rewards and cardholder benefits.
However, having multiple credit cards also raises the risk of unmanageable debt. It may be easier to miss a payment when juggling multiple cards. There may also be multiple annual fees to pay. It can be hard to keep up with rewards. Finally, every application for a new credit card leads to what is known as a "hard inquiry" on the credit report. A large number of hard inquiries can be damaging to a person's credit. Ultimately, people should decide on the right number of credit cards based on these factors and their individual situations.
Even people who normally use credit cards responsibly can find themselves struggling with debt if there is a crisis like a health problem, a job loss or a divorce. For some of these people, bankruptcy may be the right option. An attorney may be able to help people identify whether they qualify for Chapter 7 or Chapter 13 bankruptcy. With the latter, people can work out a payment plan with the court that allows them to keep a home and other assets.