Embracing Financial Minimalism: The Benefits of Using a Single Credit Card

Minimalism has been a growing trend for over a decade, inspiring countless individuals to declutter their lives and focus on what truly matters. This movement has extended beyond physical possessions to financial habits, leading many to adopt a minimalist approach to credit card usage. At O1ne Mortgage, we understand the importance of financial health and are here to help you navigate your mortgage needs. Call us at 213-732-3074 for expert advice and services.

One Isn’t the Loneliest Number After All

While the average U.S. consumer holds about four active credit cards, a significant portion of the population opts for a simpler approach. According to Experian data, 25% of consumers use just a single credit card as of the first quarter of 2024. This trend towards minimalism in credit card usage is not only common but also beneficial in many ways.

Single Card Users Have Higher Average Credit Scores and Lower Balances

Consumers with only one credit card tend to have lower average balances and higher credit scores compared to those with multiple cards. The average balance for single credit card users is $2,134, significantly lower than the U.S. average of $6,541. Additionally, these consumers utilize only 21% of their total credit limit, compared to 29% for all consumers. This responsible credit usage contributes to their higher average FICO® Score of 718, compared to the national average of 715.

Many Consumers With One Credit Card Are Younger

It’s easy to assume that younger consumers might have only one credit card due to their limited credit history. However, Experian data reveals that a significant portion of every generation, including Gen Z, Millennials, Gen X, Baby Boomers, and the Silent Generation, prefers to use just one card. This choice reflects a conscious decision to maintain simplicity and control over their finances.

The Single-Card Habit Is Everywhere

Minimalist credit card usage is not confined to any specific region. Experian’s data shows that no state deviates more than 4 percentage points from the national average of 25% of consumers using a single card. Vermont leads the way with 29.2% of its consumers having only one credit card account.

Balance Transfer Offers Can Help Reduce the Number of Cards You Carry

If you have multiple credit cards with balances and wish to simplify your financial life, consider a balance transfer credit card offer. These offers allow you to transfer balances from other cards to a new card, often with a 0% interest rate for a promotional period (typically 12 to 21 months). While there may be a balance transfer fee of 3 to 5%, this strategy can help you consolidate payments and save on interest.

To take advantage of balance transfer offers, you’ll need a good credit score. It’s essential to stick to a repayment plan to avoid restarting the interest-accruing process. By managing your balances effectively, you can enjoy the benefits of a minimalist wallet and improved financial health.

Conclusion

Adopting a minimalist approach to credit card usage can lead to better financial management, higher credit scores, and lower balances. At O1ne Mortgage, we support your journey towards financial well-being. For any mortgage service needs, call us at 213-732-3074. Our team of experts is ready to assist you in achieving your financial goals.

Embrace the simplicity of using a single credit card and experience the joy of financial minimalism. Your wallet and your credit score will thank you.