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Wallet of Plastic

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It’s widely believed that the more credit cards you have, the better your credit rating. MSN Money, with the help of some experts, debunks that common misconception and recommenhds having two to six credit cards, and using them wisely:

Keep your debt ratio low. Don’t carry a balance higher than 30% of the credit limit. I don’t carry any balance at the moment, but if I choose to play the 0% balance transfer game, my debt ratio will likely increase, affecting my credit.

Make payments on time. This is a no-brainer. Automatic withdrawals are the best thing to use, but if you can’t do that, send in your check with enough time to spare.

Don’t close too many credit cards at once. This, like spending too much of your limit, will cause your debt ratio to increase.

Stay away from store credit cards. Retail stores often lure people with discounts to apply for cards at the point of sale. These cards usually have very high interest rates. If you can afford to pay your purchase off at the end of the month, it may be worth it to sign up. If you can’t afford to pay at the end of the month, you’ll be charged the interest until you can, but you probably shouldn’t be making the purchase anyway. Also, according to a nonprofit consumer-education organization, each application for a store credit card drops your credit score 20 points.

CNN is reporting that biometric transactions are making some headway. This will allow you to pay with credit for purchases using your fingerprint (or someone else’s severed hand — why not?) instead of plastic.

In order to take advantage of the service, you will need to register your fingerprint with Pay By Touch or BioPay, both free services. Albertsons is testing the technology in its retail stores.

Biometric technology has some drawbacks: Identity theft is difficult to manage and fingerprints can become damaged.

Updated February 6, 2012 and originally published July 19, 2005.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

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