Frugal Tips

When it comes to credit cards and frugality, less is more. The more credit cards you have, the more likely you are to end up in trouble.

One aspect is obvious - the more cards you have, the higher your overall limit may be, giving you more opportunity to run up debt. Cutting it to one card can give you the operating flexibility you need without excess temptation.

But that's just the start of it. If you build up a bulging wallet full of different types of credit cards, it can become hard to stay on top of them. Every gas station card, department store card, as well as all purpose card is one more statement you have to analyze, and one more bill you have to pay on time.

Because of little noticed provisions in the fine print of many credit card agreements, falling behind on just one of those many cards can slam you with extra interest payments. So called "global default" provisions allow credit card companies to increase your rates - often to eighteen percent or more - even if you are fully up to date on their account, so long as you are behind in payments on even one card in your wallet. That unneeded and rarely used department store or gas company card can skyrocket the interest rates on your main cards if you overlook a bill.

Bottom line - don't load up on credit cards. Every card in your wallet adds to your risk of accidental default, and hence your risk of getting jammed with sky high interest payments.