Credit is a tricky beast. Falling into a black hole of credit card debt is very easy to do, and very dangerous. On the flip side, avoiding credit cards altogether is just as dangerous. If you don’t have at least one credit card, you won’tearn a credit rating, which means you won’t be able to secure a mortgage, a loan, or even store credit without a co-signer.

So when should you use it, and how many credit cards should you have? Unfortunately, the answer isn’t simple, but this is a general overview of how it breaks down:

Don’t Think of Credit Cards as Supplemental Income

If you can manage this, then it doesn’t matter how many credit cards you have. But as soon as you start thinking of your credit card(s) as your own money to spend, you’re stepping on a slippery slope.

When people max out their first credit card, it can be tempting to apply for a second, third, or even fourth with another bank. However financial experts – and even just those who are good with money – can tell you that this is the last thing you should resort to. Interest rates and annual fees add up quite quickly, and the odds are that you’ll find yourself with a pile of debt that you’ll struggle to pay off.

Always pay off your credit card as soon as possible and avoid using them again until you’ve eliminated the existing debt!

When Should You Use It?

Credit cards are very convenient for travelling or shopping online, but you should only spend on credit if you can afford to pay this debt with real cash the next day.

If you have a credit card belonging to a benefits program like frequent flyer miles, it can be beneficial to use credit for everyday purchases like groceries or clothing so that you can obtain rewards points while creating a positive credit score. But the same rule stands- If you can’t afford to pay off these purchases in the same month, then skip the credit card.

The Perks of Multiple Cards

Having multiple credit cards is risky, but also has its perks. The most obvious plus is that the more credit accounts you can successfully manage and pay off, the higher your credit rating will be.

Another perk is the aforementioned rewards. A lot of different banks offer different rewards systems, so some people will opt for more than one card to take advantage of various bonuses.

Lastly, some people have more than credit card for security reasons. One for everyday life, and a separate low-limit card for online purchases or travelling. The latter is great protective measure against credit fraud, since even if your info is compromised; the culprit won’t have access to thousands of dollars of credit.

Always remember: Credit isn’t Money.

Yes, we’ve already said it, but the point can’t be stressed enough: credit is not the same thing as having money. Although spending credit might lead to immediate fulfillment, the long-term risks are extensive if it can’t be paid off immediately. As long as you remember this and don’t spend money you don’t have, the amount of credit cards you have won’t negatively affect your credit.