NEW YORK (TheStreet) -- Are you too plastic for your own financial good? Although there is no magic number for the number of credit cards that should be in your wallet, some key questions can help you determine whether you're charging around town with more cards than you need.

According to recent data from


, the average U.S. consumer has about three open and active credit cards. Whether that number is too many, too few or just enough is really a question of how one

uses and manages the accounts.

If you have the tendency to spend more than you have, you might need fewer than three credit cards or none at all, says Harrison Lazarus, a financial consultant and founder of

Harrison Lazarus Advisors

. On the other hand, if you spend well within your means, more credit cards could be good for you. "You will be able to access money when you need it, obtain fringe benefits like rebates and mileage, and improve your credit score," Lazarus says.

If you are unsure (or in denial) about your spending habits and general attitude toward credit, here are some warning signs you have more credit cards than you can handle:

1. You pull your annual credit report and find open credit cards you had forgotten having.

Do you open a store credit card every time you hear the words, "additional 10% if you open an account today"? Do you mail back credit card applications in exchange for 15,000 or so bonus miles? Chances are you have credit cards lying around that you have not used since the day you gave in to their appealing introductory offers.

Rod Griffin, director of public education at Experian, says open accounts that you have forgotten could increase your risk of identity theft. Cards lying around could be stolen and used to make charges.

If you have unused credit cards that you do not want to close just yet -- more on that in a moment -- Griffin says it's best to lock them away or keep in a safe deposit box in your bank.

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2. You are not paying your credit card bills on time.

You know you have too many credit cards when you start having bill payment issues. If you own 10 credit cards, for example, and you use all of them, you have 10 monthly statements to deal with each month. "Having too many credit cards can lead to the lack of time and focus to ensure proper credit card management," says Kimberly Howard, a certified financial planner and owner of

KJH Financial Services


Every credit card will require a payment date and each one could be different. This payment juggling, Howard says, could lead to

missed payments or late payments

, which could lead to a decrease in your credit score.

Even just one credit card might already be too many for your own good. "The total balance on all cards compared to the total credit limit on those cards is called the utilization rate," Griffin says. "A high utilization rate, whether you have one card or many, is a strong indicator of credit risk and will significantly impact credit scores."

3. Your credit score has been steadily dropping.

Several factors influence your credit score: previous payment performance, outstanding debt and the length of time the credit has been open.

Inquiries and new accounts also affect your credit score. Every time you apply for a credit card, an inquiry is added to your report and your credit score goes down a little. "An inquiry is viewed unfavorably because it means you are shopping for credit," Lazarus says.

To find out if the number of credit cards you own is a reason for your low credit score, pull your credit report and look at the risk factors. If "too many revolving accounts" is listed as a risk factor, it might be a good idea to ignore future card offers and think about closing some open accounts.

4. You are having a difficult time getting a loan.

Having too many credit cards could be one of several reasons you are being denied a home loan or a car loan. Howard says loan officers nowadays seem to frown upon borrowers with more than five credit cards.

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Even if you maintain zero balances on several open credit cards, you can be considered a risk. "The loan officer realizes that you could use all of your credit cards after the loan is approved, and that will affect your

ability to repay the loan

," Howard says.

Although a high credit score will help prove you are worthy of loan approval, Howard explains it is not always the case. She has observed that since 2008, loan officers have been very careful in approving loans. "They are favoring mostly those with a limited number of credit cards, in addition to having a high credit score."

5. You are saving less than 10% of your gross income.

If you look at your savings and you're not comfortable with what you see, it could be that you are spending (and charging) more than you can afford. Ideally, Lazarus says, you should be saving 10% or more of your gross income.

For example, if you earn $3,000 every two weeks and get paid $2,300 after taxes and other deductions, you should be able to save at least $300 every two weeks.

If you find that goal hard to achieve, fewer credit cards or none at all might be the way to go. "Less or no credit is better because you will avoid overspending, underpaying, incurring excessive interest and reducing your credit score," Lazarus says.

Next steps: If, after reading this, you are convinced you have too many credit cards, should you then start closing accounts? How do you know which cards to keep?

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If you are looking to cut the number of credit cards you own, Howard says the first ones to go should be store credit cards, specifically those not carrying the logos of


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American Express

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"Store credit cards are easily given to individuals with low creditworthiness," Howard says. "Once you have MasterCard, Visa or American Express, you need to start thinking about closing those store cards, because they will only hurt you during a loan application process."

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Closing credit cards, however, should not be done all at the same time. Note that each time you close a card, you will take a small hit on your credit score. Howard's advice is to allow a six-month interval so your credit score could recover before the next card is closed.

Lazarus suggests keeping credit cards that have no annual fees, no overseas transaction fees and offer rebates or cash back. He says the

Chase Ultimate Cash Award MasterCard


CapitalOne Visa


American Express Blue

are worth considering. "If you're going to use credit, you might as well make the most from it. In today's world, credit card issuers want your business and are willing to reward you for it."

If you find that the number of credit cards you have is not a problem, Griffin at Experian says you should be focusing on other financial issues that could be having a greater effect on your creditworthiness.

If you find it difficult to curb your spending or use of credit, you may want to check out the

National Foundation for Credit Counseling

. Another useful resource is

, which lists financial advisers in your area.


Written by Marilen Cawad in New York.

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Marilen Cawad


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