I am quite opposed to the use of credit cards, but have a friend who seems to virtually collect them... (about six that I know of .)

I say this is a recipe for disaster but am told it's no problem, so long as payments are maintained and all the available credit isn't used up.

I'm sure there must be a downside to having lots of (even unused) available credit... does anyone on here know?

low credit rating when taking out a mortgage/loan
also higher risk of identity fraud / credit card cloning

My example pertains more to the US, but may be relevant in Oz for all I know - not enough credit history (no cards or just one) is a detriment in getting a loan. The only good use for the cards is basically to help you through one large(-ish) purchase every once in a while, the one you;d rather split into two-three payments, or be a safeguard in case you totally run out of cash and need a gas tank filled to get home... That's the one you keep in the bottom of your shoe in case your wallet gets nicked

Optimal amount of cards is 2-3 from the credit score prospective, but they also pay attention to your credit line use ratio - if you are always up to the limit, it's not good, and if you have too much available credit it's no good either believe it or not.

Having too much credit (many cards or one with very high credit limit) is considered a risk - you can rack up lots of liabilities very quickly without an ability to meet your credit obligations.

I've always been of the belief that debts must be paid and if you want something save for it. But lately I'm wondering why bother, it seems that every single banker and politician across the world is corrupt, only interested in feathering each others nest. Meanwhile the man in the street is having austerity rammed down his throat to pay for it all.

Punishment for putting a post on facebook during the Uk riots = 6 months in jail, a criminal record and quite possibly a career and life ruined.

Punishment for being in charge of Barclays while they play a part in rigging the global financial system - Multi million pound payoff and getting to retire early

The system isn't fair anymore, if it ever was. I would now have absolutely no problem with someone taking out multiple credit cards, blowing the lot and then declaring themselves bankrupt.

Diamond wasn't the man in charge when they were doing the rigging, John Varley gets off scot free.

We have one credit card, if we pay for something on it, we pay it off in full when the bill comes in. If we don't have the money in the bank for something, we don't get it, simple. Don't have store cards either, they're scary.

It's useful to have several cards: we have one that gives QF points, one that makes no extra charge for international purchases in another currency, one for use if the first isn't accepted (guess which one *that* is?) and one kept in the UK for when we are there.

Providing you manage the payments properly it's not a problem.

Credit rating stays the same however borrowing power is lowered when taking out a mortgage.

Used smartly a card for use on high risk transactions would lower risk.

I would always buy or order a high cost item via a credit card, even if I had the money available, as it gives you, in the UK, legal cover against the supplier going broke of failing to deliver and you don't have to go through the courts to get your money back.

good point. In the US you can not hire a car without a credit card. Paying for air travel with most credit cards gives you automatic insurance cover for life and baggage.

We use a CBA card for as much as possible here and always pay it off in full. Using it gives us some insurance for purchases, points towards FF or store gift cards ($300 per year), free loan of a couple of thousand dollars or more a month, flexibility in emergencies (not financial). It doesn't cost us anything and we get money back from it, so why not? We even pay the rates on it.

Talking of *that one*, is it really worth using as it is not accepted in so many places or so many extra charges are slapped on? Do all the extra charges not end up cancelling out the benefits? Just wondering as we have one free with our mortgage that has never even been dusted off from the safe...

I've found the Amex card *is* accepted in most places, actually: but when it's not the other card comes in valuable. The charge to *you* is the same anyway.

I dont see the sense in multiple credit cards. Having 1 for emergencies or big purchases should be enough. Perhaps a visa which seems to be more widely accepted. Most places will take a MasterCard debit card. That's the setup I have.

We have cards for different purchases, groceries on one, fuel, school expenses, business on another, purchases of products with a warranty on another where the warranty is doubled by the credit card company. Easy to keep track of where expenses are being incurred - no charges if paid on the due date and no ATM fees for drawing cash.

Edited to add. During interest free period you're using your credit card, your cash is sitting in your bank gaining interest.

I have 3 cards in use; one daily card (earning FF points paid each month in full) and one for travel and one other as a back-up. I definitely see the point in having a credit card - I recently flew back to the UK and upgraded from Economy to Business and it was totally worth it! It took me 4.5 years to earn the points made up of lots of bonuses (from other now closed cards) and flights (work and leisure) plus nearly all my day-to-day spending. It's slow going at times but I see it as 'something for nothing' - no interest, no fees and points for buying things I'd buy anyway.