Americans Holding More Credit Cards

Here's a very interesting piece from Money Central that details a new study on credit card use. The summary: the average American is holding more credit cards. The details:

Credit card use in the U.S. is growing, with 14% of Americans holding more than 10 cards, a survey by one of the giant credit-reporting agencies has found. That's up from 2004, when 10% had more than 10 cards.

The study, released today by Experian, identified two groups of heavy card users: the 14% who own more than 10 cards and another, at times overlapping, 14% who use more than 50% of the credit available to them. This last group alone holds an average of nearly seven cards each, two more than in 2004.

Yikes! Seriously, who needs ten credit cards? And who has seven credit cards and is using more than 50% of the credit available to them? Certainly most of these people are mis-using credit cards.

But there's more. Here are a few extra tidbits:

• 51% of Americans who have established credit own two credit cards, up from 49% in 2004.

• The average American holds four credit cards, up from 3.2 in 2004.

• Fewer Americans -- 14% -- are using 50% or more of their available credit than in 2004, when 16% did. These high users have credit scores about 30 points below the national average.

A few thoughts here:

1. We own/use two credit cards. The first earns us money and the second saves us money.

2. I would have guessed that the average American owned four or five credit cards, so this second fact isn't really a surprise.

3. Seems like a few people are getting smarter and using less of their limit. Either that or their limit has gone up. In this latter case, they could actually have more charged on their cards but the percentage could have dropped due to higher limits/new cards added since 2004.

For those of you interested in getting out of/controlling debt, see Best of Free Money Finance: Debt Posts and Best of Free Money Finance: Credit Card Posts.

Comments

[Golbguru]

Quick thought: "30 points below the national average" ..that's a bit *not-specific* statement. Score may vary by +/-30 points from one credit agency to another, for the same individual.

That apart, yeah..it's a bit of concern when people start using 50% of available credit. That will certainly going to put a big ding on the scores.

Btw, *I* have 9 cards and *We* have 18 cards. :) they were gathered for various reasons and I won't go into it here. But, we still managed 750+ credit scores. That was till got into some 0% credit card arbitrage thing. After the arbitrage, the scores have dropped down, but they are still above 700. I guess, it's more an issue of how people use them rather than how many cards they have.

[Golbguru]

Sorry about the bad English. There are like a million typos in my earlier comment. It's time for some strong coffee.

[Matt]

I have difficulty imagining why anyone who isn't doing balance-transfer arbitrage would have any use for more than 4 or 5 credit cards, no matter how much credit they have. I mean, if they're keeping some old accounts nominally open but inactive for credit-score reasons, that's also another matter...but if they're packing their wallet with 10 cards and actually using them all, I have to wonder why.