by Christine Morris

Created on: February 06, 2007   Last Updated: November 23, 2009

The magic number is three.

I was talking to my mother the other day and discovered that she had independently come to the same conclusion as I had. So had my brother. And so had my friend, the doctor's wife. In fact a general survey of my friends revealed they felt three cards for different situations was best.

Now, my mother is 65 and freshly retired. She doesn't travel much and spends most of her time hanging out at home reading books from the library. Occasionally, she substitute teaches for something to do. My brother is 45 and drives a truck earning around $90,000 a year. With no family of his own, he's got more disposable income than should be allowed by law.

I am an EFL teacher currently working heading back to Korea with my husband. We have no children and we're selling our house and our car because we plan to be world citizens for a while. My other friends range from fairly wealthy with stable incomes to earning a pittance. Somehow, if we have all figured this out by ourselves (well, the doctor's wife had a financial consultant tell her, but still) then it must be true.

You need:

1. A Discover Card for the great kickbacks. Discover was the first card to use the cashback bonus and they still have the best program going. Check the website regularly for special programs that will increase your bonus. Recently for 2 months you got 5% back for using your Discover in restaurants. Currently you get 5% back for travel expenses. The catch is that you have to sign up on the site. Unfortunately Discover is not accepted everywhere.

2. A Visa or Mastercard. These are accepted everywhere and, while you can find good bonus programs, they usually aren't as good as Discover's. Pretty much everybody has a card now so if you buy a lot of books you can choose between the Borders Visa and the Barnes & Noble Mastercard. If you fly a lot, you can get a card for any of the major carriers that will pay in miles. Head to www.BankRate.com and pick your poison.

3. An American Express. While American Express also has a convoluted points program, mostly they are good for travel because they provide so much back up. The problem with American Express is that they were stunningly inefficient. The doctor had to spend three months after his father died sorting out his American Express. I've only had my card for a few months, and I've been back and forth with them a couple of times. Sign up for one card and when you call to verify the card when it arrives, then add other. Don't try to do more than one thing at a time.

Once you get beyond that number of cards you are wasting time and risking money on late fees and exorbitant interest. You are also damaging your credit rating by carrying more credit than you should, and you are risking a headlong fall into major debt. Three cards with the same payment date and you will be fine.

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