Credit Ratio

• When you have a credit card, the company reports your account information to the bureaus on a monthly basis. Your credit ratio is a factor in calculating a credit score. The amount of available credit compared to your total credit limit on all accounts, determines your credit ratio. Too many cards that carry balances can lower your credit ratio. A rule of thumb is to keep each credit card balance at less than 30 percent of the available limit.
  
  

Too Much Credit

• Lenders often frown on credit reports that show a large amount of credit. When potential creditors see several credit cards, they are less likely to extend credit to you. With excessive credit, a person may be more likely to overextend themselves. If you plan to apply for a mortgage or automobile loan in the future, too many credit cards can be seen as a risk. Ideally, a person should have less than four credit cards.
  
  

Tips

• If you decide you have too many credit cards, avoid closing your oldest credit card accounts. Older credit can boost a credit score. The number of overall debt you should carry is based on your income. To calculate the ideal debt-to-income ratio creditors look for, multiply your gross monthly income by 36 percent. Your debt should not exceed this number.