Too Many Cards? - Too Much - Too Soon?

The number of cards, the type of cards and the credit limit per card and your total credit limit will directly affect your credit score and other credit aspects.

Credit Limit - Income Level:
Getting started generally means one low limit card. Keep in mind that the type of card(s) and how they are used can save money as well as become the basis for building your credit. Credit Cards are by no means the extent of credit used or a measure of the individuals credit worthiness.

Getting started means keeping the available credit limits in line with the total of the income strems. Most credit experts look at having 10% to a maximum of 25% credit card limit to total income. Based on that a person or family with $50,000.00 yearly income would want from $5,000.00 to $12,500.00 as the available credit. The Real Estate Section will cover this "open credit" as both a blessing and a possible curse.

Having the avaiable credit doesn't mean using the available credit amount to fund purchases by credit card purchase rather than an affordable buy from income stream or discretionary monies.

Credit Card Protections:
Using credit cards can afford three levels of protection to purchases. Buyer Protection - items purchased but not delivered or delivered differently can be refunded. Damage or loss protection or refunds. The last is Payment Protection which primarily covers the Credit Card Company.

Buyer Protection:
First Read and Understand the SDS that governs the specific card in question as to procedures and time limits. Basic Protection: Items purchased but not delivered or delivered differently than stated are protected by the Credit Card Purchase. Contact the merchant and give them a reasonable time to fix the problem. If they can't, won't or don't rectify the problem contact the credit card company in writing and tell them the charge is in dispute. If the merchant doesn't fix the problem the charge MAY be refunded in your favor. Read your SDS cafefully and/or contact the Credit Card Company for complete instructions and limitations.

Extended Coverage and Protection:
First Read and Understand the SDS that governs the specific card and protection in question as to procedures and coverage limits (if any). Basic Protection: Items purchased that fail due to defect or are lost during normal use may be covered by special provisions of certain credit cards. Some cards cover accident deductible on rental card useage. This option must be carefully understood before relying on it. relying on coverage that isn't realy there can be an expensive lesson. Read your SDS cafefully and/or contact the Credit Card Company for complete instructions and limitations. Never assume coverages or protections without specific listing for a given card. Keep in mind that Credit Card Companies hold users to the written agreements even when a Customer Service Representitive (CSR) makes a statement of coverage in error.

Credit Balance Protection:
First Read and Understand the SDS that governs the specific card in question as to limitations. This is a real profit center for the company. Usual coverage is loss of job, inability to work and death. The idea is that while laid-off or laid-up the company pays the minimum payment if the problem is covered by the agreement. When the person is working again or recovered they begin paying on the card. In the case of death the balance is paid. In some cases the additional card holders my have liabilites to the Card Company. In many cases using this feature stops the card from being used regardless of open credit limits. Read your SDS cafefully and/or contact the Credit Card Company for complete informations and limitations. This card feature is usually better and more cheaply funded by either disability or life insurance. In case of job loss the small balance that should be on the card is best covered by savings money put away for the "rainy day".

Remember:
The goal is very simple - keeping as much of your cash as possible. Learning to use credit to make life easier and saving even more money. Playing the game to spend less, save more, pay the legal minimum in taxes and planning for the future.

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