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This guy has 1,497 credit cards — does he know something we don’t?

Scorpio

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#1
This guy has 1,497 credit cards — does he know something we don’t?

By Maria LaMagna
Published: Jan 6, 2016 11:13 a.m. ET


The right number of credit cards you should carry


Shutterstock
Don’t go overboard.
Here’s a story that would make most Americans gasp: A man named Walter Cavanagh, known as “Mr. Plastic Fantastic,” has 1,497 valid credit cards, a feat that has put him in the Guinness Book of World Records.

That’s a shocking number, especially since 33% of Americans own one or two credit cards, and 29% own none at all, according to a survey of more than 1,000 adults by polling firm Gallup. But Cavanagh claims to have a “nearly perfect credit score,” and credit-card experts say he could be onto something.

“Having multiple credit cards in and of itself is not a bad thing,” said Sean McQuay, a credit-card expert at NerdWallet, a personal finance website. “Many people have this idea that having a lot is incredibly risky, or signals some type of financial distress. That’s simply not the case.”

Of course, owning more than 1,000 is extreme. McQuay recommended that an individual should carry roughly two to three cards on a daily basis — one for cashback, one for travel and dining rewards and another branded card for a retailer where you frequently shop. Limiting the options makes them easier to keep track of, and some credit cards come with a cost.

What’s more, NerdWallet found that rewards credit cards have an average annual fee of $58.

McQuay himself has 15 credit cards to take advantage of their cashback and rewards, plus leftover cards from when he found himself in credit-card debt several years ago and transferred balances onto new cards. Despite having so many cards open, he says he has a credit score of 750, putting him in the “very good” FICO score range, above the average U.S. consumer’s score.

There is no “magic number” of credit cards that is appropriate for an individual, said Beverly Harzog, a consumer credit expert and the author of “The Debt Escape Plan.” “If you have a good grip on your finances, and you use the credit cards responsibly, have as many as you need or want,” she said.

Still, she said, be wary of opening too many; it often doesn’t pay off to apply for cards when a rewards bonus is available, if you end up forgetting which ones you own, or wasting them. “You don’t want to get into a situation where you can’t keep track, or you’re overspending,” she said.

There are several ways opening multiple credit cards affects one’s credit score. Any time credit must be checked, such as taking on a new loan or opening a new card, the credit score takes a hit. Applying for a new credit card lowers the credit score two to five points generally, Harzog said; which is why she does not recommend opening a new card if there is little reason to do so, especially right before applying for a mortgage or other important expense.

Plus, the average age of all the credit cards one owns can impact your credit score. Keeping older cards open — instead of shutting them down when you get a new card — will allow you to maintain a longer history of credit and can improve your credit score, although the credit-card company may close one’s account because of inactivity.

On the other hand, increasing the amount of credit at your disposal may help the credit score. If a consumer has a large amount of credit, “You’re sending a signal that you’re trusted,” McQuay said. In Cavanagh’s case, owning 1,497 credit cards amounted to a $1.7 million line of credit.

One trick: Using a smaller percentage of your available credit — your “credit utilization ratio” — also helps your credit score. The optimum percent of debt is no more than 10%, said Levin, “but that’s like telling someone they can only eat one potato chip.” A more realistic goal would be 20%; at 25%, carrying too much debt ends up negatively impacting one’s score.

NerdWallet explains that how much you use one card, known as your “per-card utilization,” and your total use of credit across all cards, known as “overall utilization,” are equally important.

If you have a $1,000 balance on a card with a $5,000 limit, your credit utilization would be 20% (a calculation of your “per-card utilization”).

“Overall utilization” is calculated by adding the amount owed on each card and comparing to the credit limit. For example, carrying a balance of $1,000 on a card with a $5,000 limit, plus an additional $3,000 on another card with a $5,000 limit, would put you at $4,000/$10,000, or 40%.

Experts recommend using several cards (although not as many as Walter Cavanagh), if the consumer reliably pays them off and takes advantage of rewards, including cashback, fraud protection and price matching.

There are obviously significant risks to owning so many cards. More cards can lead to higher spending and unpaid bills, said Adam Levin, the chairman and co-founder of Credit.com and the author of “Swiped.” (This couple in New Richmond, Wis., had 11 credit cards and $89,000 in credit-card debt, and had to work several jobs to clear it.)

“When people look at credit cards,” Levin said, “you have to understand it’s either a wonderful enabler or a weapon of individual destruction.”

http://www.marketwatch.com/story/th...rds-does-he-know-something-we-dont-2016-01-06
 

Goldhedge

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Debt = Slavery
 

Cigarlover

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I wonder if he gets a statement from all of them every month. Cash is so much easier.
 

gringott

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He's a genius!
 

brosil

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Oh good, now I can have a different nightmare.
 

the_shootist

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The guy is a freakin idiot

That is all!!
 

TAEZZAR

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#10
Now if he were to get cash advances up the ying yang, and buy metals right before the big collapse.... Jesse Livermore?
I was thinking along a similar line.
Run the cards up to max. & file BK or disappear.
What fun to fvck the banksters.
 

Malus

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In a world gone mad....
#11
I was thinking along a similar line.
Run the cards up to max. & file BK or disappear.
What fun to fvck the banksters.
Unfortunately, it doesn't f*ck the bankers, it f*cks us. All loses are covered by the taxpayer whether its government misspending or big corporate bailouts or scams like this. The cost is always transferred to the slaves.....
 

Montecristo

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#12
What a nightmare changing the billing address on all those cards
I wonder if he gets a statement from all of them every month. Cash is so much easier.
if he ever moved
 

brosil

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#13
I seem to remember that you can't clear a cc with a bankruptcy anymore.
 

TAEZZAR

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Unfortunately, it doesn't f*ck the bankers, it f*cks us. All loses are covered by the taxpayer whether its government misspending or big corporate bailouts or scams like this. The cost is always transferred to the slaves.....
I knew that before I wrote it - it just sounded good !!
edit.
If enough people did it, it might be effective, cause the banksters are being very tight with loans, it may not be passed on that easily.
They actually need us more than we need them.