Why This YouTube Millionaire Carried 11 Credit Cards

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If you have a plan, there may be no limit to the number of credit cards you should keep.


Key points

  • The more credit cards and the lower the balance, the better your credit score.
  • No matter how many credit cards you have, be sure to use each one every three to six months to avoid cancellation.

In 2018, YouTube millionaire Graham Stephan decided to add a new credit card to his wallet full of credit cards. In fact, it was his 11th. While this may seem like overkill, Stephan’s reasons for doing so are quite ingenious.

All about diet

Stephan says he picked up this 11th credit card because it offered 100,000 rewards points to users who spent at least $5,000 in the first three months. For Stephan, losing five thousand dollars was child’s play. One of the houses he owns needed a new roof and Stephan told the contractor he would put the first $5,000 of the bill on the new credit card and pay the rest in cash. Then, when the bill was due, he paid it in full.

In fact, that’s why Stephen doesn’t mind having so many credit cards: he pays off each balance in full every month and never carries a balance. In other words, it accumulates reward points and never pays a cent in interest.

Once he paid that $5,000 bill in full, Stephan was left with 390,000 rewards points – 100,000 from the new card and 290,000 points he had accrued from other programs. credit card rewards. According to the young entrepreneur, 390,000 points were enough to pay for 15 round-trip plane tickets anywhere in North America, as well as a week’s vacation.

Cards with annual fees rightly bother him

Of the 11 cards Stephan owned in 2018, only one had an annual fee. This credit card company charges $25 a year, a charge that Stephan finds ridiculous and says he would never pay again. But, as it is one of his oldest cards, he would never consider canceling it.

Why? Because a factor called the “length of credit history” represents 15% of its FICO® Credit Score. The longer a person has managed credit, the higher this part of their score.

Having 11 credit cards suits him well.

Given the way he manages his credit, Stephan sees no harm in the number of cards he carries. Here are three of his reasons:

1. Amounts due

Sometimes called the “use rate,” this element of a person’s FICO® score compares the amount of credit a person has to the amount they actually use. For instance:

  • Person A has two credit cards, each with a spending limit of $5,000. Person A owes $5,000 on one card and $2,000 on the other, for a total of $7,000. This means that person A uses 70% of his available credit ($7,000 ÷ $10,000 = 0.70).
  • Person B has five credit cards, each with a spending limit of $5,000. Person B also owes $5,000 on one card and $2,000 on another, for a total of $7,000. However, Person B uses only 28% of his available credit ($7,000 ÷ $25,000 = 0.28).

The less a person can keep the amounts owed, the better their credit score. Amounts owed represent 30% of a FICO® score.

2. Payment History

As mentioned, Stephan pays off his credit cards in full every month, and that’s a smart move in terms of credit score. Payment history is worth 35% of a FICO® score. Stephan admits that he only uses two of his cards regularly, but he really wants them to be paid in full. And to make sure a payment never slips through the cracks, he has his cards set up for automatic payments.

3. The money he would have spent anyway

Graham says it doesn’t make sense to take a credit card and then figure out things to charge. He only uses a card for purchases he should make, whether he uses a card or not. The roof is a prime example. And once a card has been used, it’s safe to redeem before the next billing cycle.

A few words of warning

It is easy to get into debt. For example, you may have every intention of paying off a credit card at the end of the billing cycle, but your car breaks down or you need to travel out of town in an emergency. Unless you’re absolutely sure you can pay off your credit cards every month, collecting them might not be a good idea, especially if you find yourself taking a cash advance on a credit card to pay for it. pay another.

Also, while Graham says he only uses two of his cards regularly, all credit card holders should get into the habit of using each card at least once every three to six months to keep them going. active. For some, that means making a small purchase, logging into the credit card’s website, and paying it off in full. Credit card companies have the right to cancel a card for inactivity. And once a credit card is canceled for inactivity, that’s one less pot of available credit to increase a borrower’s utilization rate.

No matter how many credit cards you carry, the goal is to have a plan to get the most out of them without allowing them to rush you.

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