Is Having 7 Credit Cards Bad? Pros, Cons & Management Tips
Ever wondered if owning 7 credit cards is risky or smart? This guide explains how multiple cards can impact your credit score, how to manage them, and when it's too much.
Credit Utilization: Why It Matters and How to Manage It
Ever wonder why your credit score jumps up after you pay down a card balance? It’s usually the credit utilization ratio doing its job. This ratio shows lenders how much of your available credit you’re actually using. A lower number tells them you’re not a risky borrower, which can shave points off your score if it gets too high.
How to Calculate Your Credit Utilization
First, add up the balances on all your credit cards. Then, total the credit limits for the same cards. Divide the balance total by the limit total and multiply by 100 – that’s your utilization percentage. For example, if you owe £800 on a £2,000 limit, your ratio is 40% (800 ÷ 2,000 × 100). Most experts say staying under 30% is safe, but the best score comes from keeping it under 10%.
Don’t forget to check each card separately too. Some lenders look at individual card ratios, so a single high‑balance card can hurt even if the overall number looks good.
Practical Ways to Lower Your Ratio
1. Pay more than the minimum. Even an extra £50 a month can bring your balance down fast and improve the ratio.
2. Request a credit limit increase. If your income is steady, ask the issuer for a higher limit. A bigger limit with the same balance drops the percentage automatically.
3. Spread purchases across cards. Instead of maxing out one card, use several low‑balance cards. This keeps each individual ratio low.
4. Time your payments. Paying a few days before the statement closes means the balance reported to credit bureaus is lower.
5. Consider a balance transfer. Moving debt to a card with a higher limit or a 0% intro rate can reduce utilization while you pay down the amount.
Keep an eye on your credit report at least once a month. Free tools from major bureaus let you see the latest utilization numbers, so you can adjust your spending right away.
Remember, credit utilization isn’t the only factor in your score, but it’s the one you can control quickly. By keeping the ratio low, you’ll see a steady rise in your credit rating, better loan rates, and more financial freedom.
