How many credit cards should you have?
By Kristin Arnold • Bankrate.com

Look through your wallet. How many credit cards do you count?

Have promises of better rates, perks and lower fees caused your wallet to overflow and your mailbox to be stuffed with hundreds of offers each month?

While most Americans carry between five and 10 credit cards, some people carry up to 50 -- which could wreak havoc on your credit score.

So, how many credit cards should you have?

Most experts say there's no single magic number. Rather, the question can be answered by scrutinizing how much you spend and how much you can pay off. But there is an upper limit: Credit agencies warn that the more cards you have, the bigger risk you carry for racking up debt and damaging your credit.

"Some people go hog-wild at Christmas and open lots of store credit cards to get that 10 to 15 percent off their purchase," says Cate Williams, vice president of financial literacy at Money Management International. "Relatively speaking, that is a good idea if you pay off the balance and close the card right away. If you don't, then you will be costing yourself more money in the long run when your credit score isn't up to par."

Steve Rhode, president of Myvesta, a nonprofit consumer-education organization, agrees, saying that each time you open a store credit card, 20 points are taken off of your credit score because he says, "Historically, store credit cards are issued to anyone with a pulse. They issue credit cards to people who otherwise can't get credit."

Other credit counselors say that you should open a store credit card if it is a store that you shop frequently. Williams says that many store credit cards provide their customers with coupons, bonus points and information on upcoming sales that can only be obtained if you carry the store's card. However, she highly recommends that you open no more than one favorite-store card.

According to Steve Bucci, president of Money Management International Financial Education Foundation, the average person carries 11 "credit vehicles." Typically, seven are different types of cards and four are installment loans for cars, furniture, student loans or mortgages. Some credit experts see people with 45 or more credit cards -- many of them are high-income earners. Some are people who think that the more credit you have, the better, says Bucci, who also writes The Debt Adviser column for Bankrate.

He says a good rule of thumb is to keep two to six credit cards. "Make sure the credit cards you have are Visa, MasterCard, American Express or Discover, because merchants will take almost any of them," he says.

Try your best to pay them off, or if you can't pay them off, find a credit card that has a low interest rate to use for emergencies when you need new tires or when your water heater breaks, says Williams. "It's also a good idea that your other credit card has reward points or air miles, something that gives you something back. That card doesn't have to have a low interest rate if you pay it off every month."

Another rule of thumb to remember is to keep your debt ratio under 50 percent. If your credit card has a $5,000 limit, don't carry a balance of more than $2,500.

"Keep credit purchases under 50 percent of the credit limit. (If you have a) $5,000 limit -- and you want to buy a $4,000 furniture set -- split the purchase onto two cards," says Williams. She says that creditors don't like to see a card almost maxed out; they look at you as a risk, someone who is using too much credit and has trouble paying off debt.