Why do you need so many credit cards in the US?


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Every American has much more than just a credit card, and for every little thing one of these cards is used. One or two of you has probably wondered why that is. When I wondered about the many credit cards of my predecessor at the cash register, I wanted to know exactly. So I asked my daughter in law why do you need so many credit cards in the US?

She knows my curiosity about her home country and of course explained it to me patiently, which in my case was not so easy to understand. Your statement has shown me that we Germans are very different from the Americans in terms of payment behavior. Most of us only spend the money we have, the Americans pay almost everything by credit card.

Credit Cards in the US?

In order to prove a good financial history!

You have to be able to prove a good financial history, otherwise you will not easily get a new loan. But if you have no credit history at all, that is even worse.

The American credit institutions reward credit-financed payments if you do not exceed the granted credit limit and are always done on time. You then increase the credit card availability frame. Thus, the reliable payment of all bills and credit cards gradually leads to the establishment of a good credit history. This one needs, for example, to buy something on installments or to rent an apartment, even to complete a mobile phone contract.

If a credit card is not used, it will be closed by the bank and the credit limit will deteriorate.

An example of the credit limit (credit line) in the USA!

Each credit card increases the maximum credit limit of the owner. Assuming you own a $ 10,000 credit card and have no other credit. Now you are planning to buy a house and go to a bank where the credit history check is done. For the bank clerk, this looks like you've been trusted by other banks with only $ 10,000 in the past. The chances of getting credit deteriorate.

However, if you have 20 credit cards with a limit of $ 10,000 each, all of which is paid off, then the processor sees you have a maximum credit limit of $ 200,000 and you can handle large amounts. This increases the chances of getting the loan.

Establishing the credit history, so the financial history takes many years. The example below took 15 years in the case of my daughter-in-law. At the age of 16 she got her first credit card and had to learn to handle it responsibly. It is not possible to simply apply for many credit cards to increase the limit. Whenever you apply for a new credit card, a credit check is made. Here, among other things, the length of the financial history is examined. If this is short, you will not get the requested credit card. When that happens, so a credit card that has been applied for is not granted, it worsens the credit history. Not granting the credit card shows a future bank that another bank has not trusted the person to handle the responsibility of an additional card.

Credit Score and Credit History, what is it?

Only if you have a credit card in the US and can prove a credit history, you get a credit score. This is then crucial for the approval of a new loan.

This credit score is a score of 300 to 850 and gives information about the creditworthiness of a consumer. A score below 600 indicates that you have had too much open credit in the past, or have difficulty repaying your debts. A score of 660 and 724 shows that a borrower has a fairly long and mostly positive history of loan repayments. Values ​​over 720 indicate that a borrower has a very solid credit history and is reliable.
The credit history thus refers to the past credit actions of a consumer and is a record of his repayment behavior.

Anyone who has not taken credit card or credit in America has no credit history. Without this, a car purchase or installment loan is hardly possible. The search for accommodation is also a problem because even private landlords have the opportunity to query them.

What is the American credit score composed of?

In essence, one can easily estimate the future credit score. It does not matter how much you earn, but only how much you have spent on loans.

A funny example is Warren Buffet. The richest man in the world has a credit score of just 718. That's because he does not like credit. He still lives in his house that he bought in 1958 for $ 31,500 euros. Of course, the house has long been paid off. With a fortune of $ 78 billion, he does not really depend on additional credit. In the eyes of the credit score, however, this looks like Warren has only an average credit rating.

5 factors influence the American credit score!

Payment history (35%) on-time payments, bankruptcies, etc.

Open credits (30%), how much do you owe in comparison to the granted credit limit? As a rule of thumb, you should keep credit utilization in the range of (9%). In this way one shows a responsible handling with the credit cards. This ensures that the cards are not closed by the banks for non-use.

Long history (15%), when does the person have credit cards.

Types of credit (10%), paid credit cards and loans based on assets are good for the credit score as long as they are always paid on time.

New loan requests (10%), new requests are a double-edged sword. If a new loan is granted with each request, then the score increases. If one is rejected, the American credit score deteriorates dramatically.

Why do you need so many credit cards in the US?

Thanks to the detailed explanation of my daughter-in-law, I know that now exactly. Now, do not be surprised if somebody even pays a euro with a credit card. Because only then does his score increase.


  • Dear Sigrid

    Personally, I like the fact that in America you can pay anything by card!

    Otherwise, I also pay a lot with a card, but most with a debit card, so it is deducted from my account right away!

    I did not know a lot and that's why I enjoyed reading your report! Thank you!

    Have a nice Sunday!


  • Really interesting contribution! I like your insider postings so much, so you can take and learn so much from it! I look forward to more!

    All the best,

  • Dear Sigrid,

    that is, if you may call it no, really scandalous, as it is in America. On the one hand, smart to make the card limit depending on use, but on the other hand, of course, very stupid, because others who may need it, would not get more credit, because they do not use their credit cards and limits as often. Clear case of profit lust ... What I'm glad that I have only one credit card for everything ... besides, it is here with us, of course, a lot smarter and more logical. Here you get a loan, if you can also guarantee with his reliable salary, that you are able to pay him off .... I hope I have nothing messed up now ... Thank you for your great article, because this question has been asked me often ....

    best regards
    Rocket man

    • I see it the same way. That threatens to burst at some point, the next financial bubble can already be guessed. Then I prefer to praise the typical German "only bares is true". Nevertheless, I found the article very worth reading.

  • I did not know that!
    Thanks for this interesting post! 🙂
    Best regards,
    Sarah <3

  • They are crazy, the Americans: D? What's that stupid system?
    I think I would ruin myself with so many credit cards .. as you said: I only spend money that I have ..
    Thanks for the insight, that was a very interesting fact that I did not know yet 😀

    Greetings and a nice evening you 🙂
    Michelle <3

  • Hello,
    my girlfriend has already told me that in America is like that. It became very clear to her when she also wanted to buy a house there. Now they finally have one 🙂

    Love Linni

  • Hey,

    again a diverse interesting contribution! I do not like to pay by credit card, I'm very afraid of losing track. 😀



  • Very interesting post Sigrid! I did not know the background and for me, would not be so many cards in question. But that makes sense, of course.

    best regards

  • Thanks for the report and as so often I lack the understanding for American thinking ;-). I'm used to paying by card from Norway, but not with a credit card but with a bank card. This is so common that when it's time to pay with money, parents are asked to have money at home. ;-).

    LG from Norway


  • wow how thrilling but strange again. I did not know that in the US everyone has so many credit cards. I can not even cope with one, because then I constantly spend money, which I do not have. now imagine I have 10 of them I would probably declare private bankruptcy 😀
    glg check

  • Very interesting! I do not know how I would handle it. Because I prefer to spend the money that I actually own, instead of what I have not 😀

  • Yes, in fact I have often asked myself that. Last summer in New York. It's so instructive to read your posts. You get a lot of insight about the conditions in the US.
    Best regards, Selda.

  • Ugh I only have a credit card. I use them mainly for online purchases. This often saves me money. but that is the only reason why I use them.

  • Really a totally informative article. Thank you for my love

  • Thanks for your report! He brings back memories from my time in the USA. I had no score at that time, because I was attracted first and you did not want to give me a cell phone contract unless I would deposit $ 600 as a deposit. Then I lived there without a cell phone for almost 2 years. That was sometimes a bit stupid, but it went anyway and that was 2003.

    Many greetings

    Jules from http://www.travelandliveabroad.com

  • Really a very interesting contribution. The Americans are definitely different from me. This year, at the age of 32, I have my first credit card, and only because you often need it to book a hotel.

    LG, Moni

  • Dear Sigrid,

    that's funny - I did not know that! Have always wondered in the US why everyone pays minima with card. Now I know! Thank you very much for this informative contribution - I would like to learn something :-)!

    Best regards and nice evening!

  • Since I've never been outside Europe, I had no idea that you really needed so many credit cards in the US, interesting! Thank you for the informative article! 🙂



  • That's really blatant. I did not know that this has to do with the "handling of money" 😀 but good to know, because I've always wondered when I was in America. Personally, I think it's great that you can pay anything by credit card - even the small parking meters 😀 at that time we paid 0.20 cents by credit card 😀

  • Wow, I've never thought about that. But you're right. So many cards I would never carry around with me, the trend to leave the cash at home, but I think definitely practical.

    Love, Sylvie from http://www.miss-interpreted.com

    • It was already a change for me, especially in the restaurants to give my card out of hand. You would never do that with us.
      best regards

  • Then I would be totally unworthy of credit under the American system :). Although I have a credit card, but only for it to get along abroad. And because there are some insurance attached to it, which would be more expensive to complete it.

    I'm also more of a security person, the less credit, the better for me. We only finance real estate. Everything else we buy in cash. Or if the money is not there, then it will save on something. But the Americans are probably VERY different.

    Thank you for this interesting report.


    • I would feel the same, I could not deal with so many credit cards. Thank you for your comment.
      best regards

  • We were in the US for the first time since 2001 this summer, but in Puerto Rico. At that time you paid for everything with traveler checks, now you pay every pups with credit card! Cash we almost never needed .... but I prefer to pay in cash for a better overview. Also here at home ....
    Our exchange student from the USA has 2 credit cards with him, at first he looked quite stupid, because not every business in Germany accepted. Well, Bares is true ...
    LG Martina

  • That's really interesting 🙂 I really did not know that, but I always wondered why some have so many credit cards (as in the movies etc).
    Thank god, this system has not spilled over to us, because I would be completely lost ...

    It's just a thought here shot through my head: Does not the circulation of the paper currency ... ?? Actually, yes, because you have to pay with the card, so you have a high score and I would believe then only pay with this ...

    best regards


  • Again a super interesting contribution from you and I have - once again - learned something! I've always been aware that American credit cards are different from ours, but I did not realize that you really needed so many credit cards and you always had to cover them to get a high credit score. Now I understand why even the small coffee at Starbucks is always paid by credit card!
    LG Ina

    • I did not know that before either and actually thought it was quite stupid to pay for a coffee with the card. Thanks to my daughter-in-law, I know better now.
      best regards

  • Everything sounds quite conclusive and interesting - up to the paragraph with Mr. Buffett:

    So suppose he's going to a bank in his old Ford, will not he get credit ?! - Well, apart from the fact that the clerk in the bank office is supposed to never again wash the shake hand;), I can not quite believe that it is the sole and only criterion ...

    But thanks anyway - some things become clearer with it.

  • Wow, that's where it comes out! I've also often wondered why and why so many ... Thank you for the great and detailed explanation * top

    All the best,

  • Wow, that was some exciting info! I did not know that you really need so many cards, if you want to have a loan. Already really bad. Especially the example of Warren Buffet shows how absurd this system is.
    Interesting post!

    Best regards,
    Laurel from https: / laurelkoeniger.eu

  • I am also a person who pays almost everything with a card. I think it's very pleasant 🙂 not always to carry cash with me

  • I knew that everything was bought there with a map. Also that you only creditworthy if you have such cards. But I did not know the exact background. Then I would rather stay here and pay cash.
    (My attempt to erase you and then to follow again did not bring the desired success, I wanted to make it so that your contributions appear again with me., Unfortunately, still nothing, then I have to stop in between looking for news ). LG, Nati

  • Oh, that's really new for me. Thanks for the information.

  • Thank you for this very insightful post!
    Now I understand what the taxi driver in NY recently tried to explain.

    Lovely wishes!

  • Oh my god, that's complicated! Since I'm suddenly happy to live in Germany, although I would find it good if you could pay more here by credit card. Thank you for this detailed explanation.
    Love from

  • Thank you for the very interesting report. But they are really quite complicated the Americans 😉

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