Credit Card Score
Source : moneytalksnews

Are you happy to have so many credit cards in your wallet? Well, this can seriously dent your credit scores! As a matter of fact, there are chances that next time when you apply for a home loan, your application gets rejected. There are many people who face this issue in their life and then they are not able to understand the real problem.

How credit cards impact my financial track record?

When you have multiple credit cards, your credit bandwidth is already engaged by the limits provided by credit cards. If you are not using these cards much, it is going to affect your credit scores. Having multiple credit cards also make you more prone to make defaults.

The defaults may be due to overspending or may be you simply do not remember following the payment schedules. Each time you default on a loan, it is going to impact your credit scores for sure. There is no second thought about it.

When you apply for a home loan, the concerned bank goes on to track your credit behavior. If you look like a frivolous shopper who buys too much and then falls into the trap of credit card instalment payments, it reflects that you need to work much on being fiscally disciplined.

Credit card outstanding attracts very high rate of interest that is above 30 percent per annum. It is the easiest way to spoil your financial position and burn a big hole in the pocket.

Banks and financial institutions tend to avoid giving loan to people who are ignorant about their income and spending ratios.

How to manage this matter?

The first thing that you need to do is to surrender the cards you do not use. Most of us do not use more than 2-3 cards on a regular basis. So, what’s the need of carrying 5-10 cards? You can simply manage your transactions with 2-3 cards.

Normally, people keep one credit card through which they can easily pay up bills at fuel stations. As most private sector credit card companies charge on such transactions, people prefer to use public sector banks that do not impose any additional charges on fuel bills.

At the same time, public sector credit cards hardly provide any benefits in terms of offers and deals. Their payback mechanisms are weak and the credit card holder does not get any benefits as compared to the private sector credit card companies which keep on offering great deals.

These companies keep coming up new deals that are attractive and meaningful. Their payback systems are quite efficient and one can get several benefits out of them. If you use just one card for all your transactions, you are able to accumulate good number of points which can be redeemed in the form of goodies or cashback.

But if you have several cards, then the benefits are spread all over the place and you tend to lose points as they expire after a stipulated period.

Therefore, it is always advisable to maintain 2-3 credit cards to maintain a healthy credit history.