What Are Consumer Credit Needs?

People's credit needs are partly based on how well they manage their credit card accounts and the way they intend to use their cards. Some businesses require customers to submit a credit card in exchange for their services. However, mismanaging your cards can damage your credit rating and prevent you from getting loans and other credit accounts.

Multiple Credit Cards

According to Bankrate, U.S. consumers appear to be almost evenly divided on whether they need more than one credit card. In a 2009 survey, The Center for Media Research noted that 51 percent of the U.S. population had two or more credit cards. Some people have several cards because they want to set aside one or more for a specific purpose. Bankrate suggests using one card exclusively for online transactions so that consumers can easily spot fraudulent charges if their account numbers are stolen online. Other consumers may just want one card with a low credit limit for online purchases to reduce the amount that potentially could be charged by an online thief.

Credit Scores

Credit card accounts that are managed properly can boost your credit rating partly because they show creditors and lenders that you can responsibly handle your debt obligations. People with well-established accounts that have been consistently paid on time may have high credit scores because these scores are partly based on consumers' payment history and the length of time they've had their accounts. However, you can also lower your credit score by maintaining high balances on several credit cards. "Kiplinger" magazine and other financial publications recommend using no more than 25 to 30 percent of your available credit on all credit cards.

Fraud Protection

Consumers who exclusively use cash and debit cards are at risk of facing more serious financial difficulties than credit card users if their cards are lost or stolen. Cash that's lost or stolen is usually difficult to recover. Debit cards are typically linked to people's checking accounts, so fraudulent transactions can tie up cash that cardholders need to pay their bills and everyday expenses. Credit card users are generally only liable for $50 worth of fraudulent transactions if their cards are lost or stolen. Furthermore, some hotels and car rental companies do not accept debit cards from customers.

Interest-free Money

Credit cards essentially allow people to use a card issuer's money, and people who pay close attention to their monthly bills can avoid paying interest charges on that money. A "New York Times" article titled "Credit and Debit Cards: What You Need to Know" notes that a cardholder who manages to pay off purchases within a credit card company's billing cycle won't have interest charges applied to those purchases. Billing periods generally last up to 45 days. Your credit card statements should specify the billing periods for your cards.