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Financial Minimalism: The Benefits of Using a Single Credit Card

Minimalism has been a growing trend for over a decade, influencing various aspects of our lives, including our financial habits. At O1ne Mortgage, we believe in simplifying your financial life, and one way to do that is by using a single credit card. In this article, we explore the benefits of having just one credit card and how it can positively impact your credit score and financial health.

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 manages with just one. According to Experian data, 25% of consumers used only a single credit card in the first quarter of 2024. This minimalist approach to credit cards is more common than you might think.

Single Card Users Have Higher Average Credit Scores and Lower Balances

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

Many Consumers With One Credit Card Are Younger

It’s not just older generations who are embracing the single-card lifestyle. Experian data shows that a sizable portion of every generation carries just one card. This trend is particularly prevalent among Gen Zers, with 36% of them using only one credit card. However, single card use is also common among Millennials, Gen Xers, Baby Boomers, and even the Silent Generation.

The Single-Card Habit Is Everywhere

There is no significant regional variation in the number of credit cards consumers hold. Vermont leads the way with 29.2% of its residents using only one credit card. Interestingly, the average FICO® Scores of single card users vary less than those of the general population, indicating a more consistent credit behavior among these consumers.

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

If you have multiple credit cards with balances and want to simplify your financial life, consider a balance transfer offer. These offers allow you to transfer balances from other credit cards to a new card with a lower interest rate, often for a promotional period of 12 to 21 months. This can help you save on interest and reduce the number of cards you carry.

At O1ne Mortgage, we are committed to helping you achieve financial simplicity and health. If you have any mortgage service needs, don’t hesitate to call us at 213-732-3074. Our team of experts is here to assist you in making the best financial decisions for your future.

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