This is how many credit cards you should have

Having a credit card can be a complete game changer. Not only can they help you build credit and net you thousands of dollars in benefits like free flights, vacations, and cash back, they can also provide you with valuable purchase protection and peace of mind.

But what’s the ideal number of credit cards in your wallet?

That’s Us – Raj Punjabi and Noah Michelson, hosts of HuffPost’s “Am I Doing Something Wrong?” Podcast – Brian Kelly, known as the “Points Guy,” asked when he came to our studio to talk about how to get the best credit card perks.

Listen to the full episode below:

“I have 30, which is extreme,” Kelly told us. “But look, I think the average person who spends smartly on their credit cards, I mean, five is the minimum.”

Five cards may seem like a lot to many of us, but Kelly explains that having different cards will offer different incentives and benefits, and he’s personally committed to maximizing rewards.

“Today, you can get at least $1,000 in value on your credit card. That’s the point,” he said. “It’s a real bonanza out there,” he said, noting that some cards come with additional special perks, such as early access to Taylor Swift tickets.

However, the biggest reason to have multiple cards is that it affects your credit score.

“Your FICO score will determine your mortgage rate, car lease rate, and even your insurance. You want to have a good credit score,” Kelly explained, adding that there are two main factors to improving your credit score.

“Number one is paying your bills on time. So no matter what, even if you can’t pay in full, you always pay every bill on time,” he said. “You have to do it—even if it’s just the minimum payment. Just say yes to me, because that’s 40 percent of your score.

The next most important factor is your debt-to-credit ratio.

“If you have a credit card — let’s say the limit is $10,000 — if you have $5,000 on the card, you’re using 50% of your credit limit, which is not good when: [the credit agencies] Report your balance,” Kelly said.

Instead, you want to have a lot of available credit and use a small amount of it, so you have a low debt-to-credit ratio.

“Suppose you have five credit cards and a credit limit of $100,000 [in total]. You have $5,000 that you pay off and on every month, but you only use 5% [of your total credit] Then your score goes through the roof,” Kelly told us. “Pay your bills on time and get a high debt-to-credit ratio, you can instantly [get your score to] superior.

Kelly said people have an “aha moment” when that happens and their scores are going up while rates are going down.

“So by getting a new credit card [with] Sign-up bonuses, which can be worth thousands of dollars a year, plus additional benefits — which can be worth thousands of dollars — plus your credit score goes up and your lifetime mortgage rate goes down,” he said. “This is victory.”

Of course, the optimal number of credit cards (if any) is different for everyone and depends on your own personal financial situation and needs. Kelly is well aware that not everyone should rush out and grab a ton of new cards right away.

“If you’re not happy with how your new credit limit is used, don’t apply for a credit card,” he advises. “To play the points game and really reap the rewards, you can’t pay a fraction of the interest above twenty percent. You’ll negate the value of all those points. You’ll be stuck in financial quicksand.

This is especially important considering Americans owe more than $1 trillion on their credit cards, and exorbitant credit card interest rates can quickly plunge users into deep debt and keep them trapped.

“Most of the advice I’m giving today is for people who are going to get a credit card – don’t go beyond your means, don’t accumulate and spend unnecessarily because all of a sudden, if you’re depleting yourself just to get points, of income, you’d lose the plot, right? “So this is great for people who have expenses no matter what in their life, you can put it on a credit card, earn valuable points, and then you pay it back in full every month, just like you would with cash.” “

We also discuss one of the biggest credit card perks you probably didn’t know you had, how to maximize your points on hotel stays, and which cards will make you feel like royalty at the airport.

Listen to the full episode above, or listen to podcasts from anywhere.

Be sure to subscribe to Have I Done Wrong? on any of your favorite podcast platforms so you never miss an episode, including our look at the ins and outs of tipping, how to apologize or pay off credit card debt, and what to look for online Love or Overcome Anxiety, Tips for Online Shopping, Taking Care of Teeth and Stool Like a Pro, Tips for Booking and Staying at a Hotel, How to Deal with Angry People, Celebrity Chef Jett Tira’s Cooking Secrets, Shocking Laundry Secrets , tips and tricks for cleaning dishes, getting your best workout, and more.

For more information about Brian Kelly, visit The Points Guy.

Need help fixing something you’re doing wrong? Email us AmIDoingItWrong@HuffPost.comwe may explore this topic in the next episode.