- 1 Who is Nickel Advisors and What Do They Want With Your Credit Cards?
- 2 Reasons to get credit cards
- 3 How does the number of credit cards impact credit score?
- 4 Benefits of multiple credit cards
- 5 How to get the most out of credit card rewards?
- 6 Disadvantages of multiple credit cards
Who is Nickel Advisors and What Do They Want With Your Credit Cards?
Nickel Advisors wants your credit cards. Nickel Advisors has begun flooding the market with debt consolidation and credit card relief offers in the mail. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect. The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2020 Reviews, the personal finance review site, has been following Nickel Advisors, Coral Funding, Neon Funding, Polk Partners, Ladder Advisors (also known as Carina Advisors, Corey Advisors, Pennon Partners, Jayhawk Advisors, Clay Advisors, Colony Associates, and Pine Advisors, etc.).
For many, acquiring a credit card is an important milestone. Credit cards help you to learn how to manage your finances and build credit to buy your first car, house, etc.
According to recent surveys, around 70% of Americans own one or more credit cards. On average, an individual owns 2 to 4 credit cards and owes up to $3,573 in credit card debts, while a single household owes around $15,675. $6,658 is paid by each household as an annual interest at the average rate of 18%. Collectively, Americans owe a debt of $729 billion to credit card companies.
Keeping these statistics in mind, you might be wondering what the ideal number of credit cards to carry that will provide a good credit score while managing your finances is. Let’s discuss this in further detail.
Reasons to get credit cards
The number of credit cards that you need depends on the reason you would be using them for. Some of the reasons to get a credit card include:
- Improving credit score and creating a credit history
- A safer and convenient alternative to cash
- Consumer insurance; some companies offer a guarantee on purchases to protect you from fraud and loss
- Emergencies; if you need to buy something immediately but don’t have the money yet
- Universal acceptance; all recognized credit cards are accepted universally
- Budget management; credit cards help you keep track of your purchases
- Company credit cards; a way for companies to provide safe and secure purchases for their employees
How does the number of credit cards impact credit score?
The number of credit cards that you own affects your average credit profile in several ways. Credit card companies consider the following factors:
- Your credit utilization: You’ll need to determine the amount you’ve charged against your total credit line. For instance, if you use 10% of your credit, that’s a good position. However, if you use 90% of your credit limit, then you’re going a bit overboard. Therefore, having more credit cards could actually lower your utilization percentage and improve your overall credit score.
- Credit inquiries: With each credit inquiry from a lender or a credit card company, your score gets a hit and is temporarily lowered. Excessive credit inquiries result in a bad credit score.
- Recent credit card activity: Consumers that utilize maximum credit limits in short periods, send across a negative message to the creditors.
- Account diversity: Creditors favor those consumers who have a diverse credit history. A mix of secured loans and unsecured loans is considered positive. When you have multiple credit cards, it helps to diversity your account.
Therefore, it’s not as much about the number of credit cards as it is about your financial management skills that affect your credit score. After all, you don’t want to end up needing credit card relief, do you?
Benefits of multiple credit cards
There are many benefits to owning multiple credit cards if you’re utilizing them in the right way. Check out some of these benefits below:
- Maximizing points and rewards: If you have multiple credit cards, then you can maximize your points and earn rewards.
- More security: Multiple credit cards provide you security in case one of your cards gets stolen. It will prevent the disruption in your purchases while your stolen card is being re-issued or blocked.
- Universal acceptance: Although most major credit card companies offer cards that are accepted globally, there a few exceptions. Therefore, it’s safer to have multiple options.
How to get the most out of credit card rewards?
If you have a credit card with rewards programs, then you need to maximize them. You should charge the card that offers additional rewards on the purchase you’re making. You can maximize your rewards by:
On-time monthly payments: Rewards cards usually have much higher interest rates, that’s why you need to make sure that you pay back on time. Rewards cards normally have 2% to 4% higher interest compared to regular credit cards.
Don’t overspend just to earn points: If you find yourself buying more than you need just for the sake of rewards, then the rewards card becomes a liability.
Utilize the card for group expenses: If you’re making a group purchase, offer to pay from your credit card, and the others can pay you back. This way, you’ll earn more rewards.
Make automated payments with rewards cards: Make your regular monthly payments you’re your rewards credit card to earn points. These payments could include gym memberships, cellular services, etc.
Learn how to redeem rewards: Many credit card users earn lots of points only to see them get wasted because they didn’t understand how to redeem the rewards. Make sure you are aware of how of the process.
If you understand the rewards system and have multiple cards, then you can efficiently make purchases so that it increases your rewards to the maximum. For instance, some cards offer double air miles for charging them on a certain service or product. So, you should always use that particular card for such purchases to earn those extra miles.
Disadvantages of multiple credit cards
Although multiple credit cards can benefit you in many ways, they can be a liability for those who can’t limit their expenses or tend to overspend. Here are a few drawbacks of having multiple credit cards:
- You are more vulnerable to find yourself in debt
- You could develop a habit of overspending, or exceeding your budget
- Keeping up with expenses, monthly payments, points, interest rates, and rewards can become a hassle
- You could end up using a credit card even in the cases where taking a loan would’ve been a better idea
- The interest rate on most credit cards increases exponentially after the introductory period
There is no ideal number of credit cards that you should carry; it all depends on your ability to manage them in your best interest.
Do You Think You Have Too Much Debt?
Did you know that Ghislaine Maxwell’s father was Robert Maxwell, the media baron? According to The Daily Beast, at the time of his death, Robert Maxwell owed $4 billion to 43 different banks all across the world.