If you are anything like us, your wallet is brimming with tons of things, from colorful plastic to outdated receipts to business cards from places you can’t remember. And, it’s ripe for some straightening out.
We’re following the example of LearnVest CEO Alexa von Tobel, who has helped us narrow down our list of expert-approved wallet essentials:
What Not To Include.
Don’t walk around with personal information like your PIN, account numbers, or Social Security card. The only identifying info in there should be your name and the best way to reach you if your wallet is found.
1. Credit Card.
You should have two credit cards to your name, but keep only one in your wallet. In your wallet, keep the main one that you do all your spending on; keep your emergency credit card hidden away in a desk drawer at home so that you won’t be stranded if your wallet gets lost or stolen. For the same reason, always make copies of your cards! They’ll come in handy if one of those cards disappears. Also, if your main card is an American Express, make sure that your debit card is Visa or MasterCard so that your plastic will be accepted wherever you go. If you have more than two credit cards, cancel only one each year (it hurts your credit score to cancel too many at once).
2. Cash.
We aim to carry around $25 to $50 at all times. Although any loss of cash is a blow, the goal is to keep little enough that we won’t, say, have trouble paying rent if we lose our wallet, but enough to split a restaurant bill with friends (there are always groans when too many people insist on paying via credit card).
3. A.T.M./Debit Card.
You should always have access to your checking account, just in case you’re in a bind and need extra cash on the go.
4. Personal Identification.
For most people, this will take the form of a driver’s license. Stores have the right to ask for an ID when you use a credit card, so you need to have one ready to show them.
5. Insurance Card.
Always. You’ll need your health insurance on hand for any medical services, and your auto insurance card in case you get into a fender bender.
6. Transportation Card.
If you use public transportation to commute to work, keep an unlimited transportation card in your wallet, which often saves a lot of money over buying individual rides. In Boston, it’s a CharlieCard. In New York, MetroCard. In D.C., SmarTrip. If you drive to work every day, this includes your AAA card, which you should have with you at all times if you’re a member.
7. Discount Club Cards.
This includes your CVS card, Regal card, promotional tenth-coffee-free cards, and anything else that fits the bill. There’s nothing worse than stopping by a store and realizing that you’ve left your gift card at home.
8. Membership Cards.
This includes things that have already been paid for, like a gym membership card.
9. Airline Cards.
This is optional, but recommended—Alexa carries around her airline cards so that she never forgets to use her frequent flyer number whenever she travels.
LV Tip: If you’re a) an iPhone user and b) don’t want to stuff your wallet with a million cards, consider this iPhone app.
To take a peek inside Alexa’s wallet, watch the video below! What does YOUR wallet look like? Tell us in the comments!
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Why only two credit cards? Won't decreasing the number of cards we have negatively impact our credit to debt ratio?
Wow! What a helpful list and video! Now I just have to go see what's actually in my wallet…
Yes, it is true that decreasing your number of credit cards drastically is not good for your finances.
You can only cancel ONE credit card a year (LearnVest shows you exactly how to do this)– so don't cancel them all at once! If you have tons of credit cards we recommend you cancel one you never use (and then put the ones you'd like to cancel in a drawer at home with a post-it-note on them for 1 year from today, with a reminder on your calendar. You can then cancel one every year until you are organized…) Ideally you would only have ~2 credit cards in the end — and you would have a main one that you use – so that all of your bills go to one place, and you can earn things like points/cash back on it.
Again, this is ONLY is you have your spending under control and not likely to over spend on a credit card. Credit card debt is the WORST THING for your finances.
The word “receipts” has a “p” in it.
Also agree to an extent w kodemonki: credit score is impacted by the extent to which you make use of available credit card lines. So you want to have high aggregate credit limit and draw on it little.
That still doesn't answer my question though. Why should you only have two cards? With two cards, let's say my credit to debt ratio is 10:1, but with 10 cards it could be 50:1. If you can use credit appropriately and never get into debt, why should someone only have two cards? My question is less about canceling cards and more about the ratio.
agreed. that's correct! Thanks for the post!
You are totally correct about the ratio. EXAMPLE–> It's obviously best if your credit line is $10,000 ($5,000 on 2 cards) and that you only have say a bill of $500. 1:20 debt to available credit.
On the number of cards, I think the most important point here is that opening many credit cards and having multiple credit inquiries can hurt your credit score. If you apply for 20 credit cards and then try to apply for a mortgage, a mortgage lender is not going to be thrilled that you have so many inquiries on your credit report.
Having less credit cards, also means:
1.) you have better organized spending (less bills on less cards)
2.) have less open lines of credit that can be stolen potentially through ID theft
3.) finally, just gives you less to keep track of.
If for some reason you really love 3 cards, that's no biggy, but we strongly do not recommend having 4-12 credit cards, as some people do!
Make sense?
Some of that makes sense. Over 10 years I've acquired about seven or so cards and they all have their place (pruning and constant management are always prudent though). I still think there's a huge difference between applying for 20 cards all at once (credit suicide) and responsibly using x cards gained over y years. Here's my breakdown:
CapitalOne – International travel; no great rewards, but no currency conversion fees (also, you can put cute pictures of place you travel to on them)
Costo AmEx – Costco
BP Visa – Gas
Chase Freedom – Everything else
Citibank – Emergency
I guess what doesn't make sense is that in some places you say that the lower debt credit ratio the better, but here you seem to be saying the opposite when you recommend canceling cards.
I have a J. Crew rewards card, a Starbucks rewards card, and a couple for frozen yogurt/ice cream shops. Is it worth it to have these, if I use them frequently but not TOO frequently? I'm aware that carrying these rewards cards increases the chances of me making purchases I wouldn't make otherwise…
What's everyone else's opinion on this?
Other things I keep in my wallet:
A small index card with the correct ink numbers for my printer – I buy alot of ink but also change printers regularly. This way I avoid buying the wrong ink and avoid a return trip to get the correct ones.
Funny but true – A 4″ cardboard ruler – when I go to buy shoes and I want to make sure they are under my limit (usually 2.5 – 3 ” for the heel) this ruler has helped me out numerous times. It has become a joke among my friends but it has saved my feet at important events and helped me to avoid returning those 4″ heels that always kill me after an hour or two!
Professional association cards – I have 7 professional cards that need to be with me at all times. As a physician – these are a requirement.
Lastly – a couple of bandaids for those nasty papercuts!
All of the above are small, lightweight and very handy for me. Hope this helps!
What is in my wallet? I am 52 years old, and this is what I carry in a man's wallet (never liked the bulky ladies' wallets:
Amex card for business expenditures; Visa for personal expenditures; driver's license; AAA card; professional guild membership cards; debit card; insurance cards; membership cards; a few receipts; a few business cards; small photos of my son, my husband and my godson; my lucky chinese fortune cookie fortune; library card. No social security numbers!! No pin numbers! $ 20.00 to $100.00. I prefer to spend my weekly allowance using cash because it can't be tracked. And one can always bargain with cash, never anything else. One of my uncles, who is a banker, told me when I was 18 that I would only ever need 2 credit cards – an Amex and a Visa and to only charge as much as I could afford to pay off entirely at the end of the month. No store cards, nothing else because they only cause trouble. He was right.
I too am intrigued by the discussion on credit cards. I have three: one for joint purchases with my husband (he has his own card for the same account), one for personal and work purchases (I often have to buy props for my magazine editing job), and one for my freelance work (I'm a licensed esthetician and do some work in that space). I've often wished I could have only one card and one “emergency” card as you say, but I love that with these three cards I can keep track of expenses for taxes and also for getting reimbursed at work. With only one card in my wallet, it would be really hard to do that… What do you all think, or do you have any suggestions?
Hi kodemonki, I'm Lauren, LearnVest's financial planner in residence. Thanks for your thoughtful comments! Managing credit is obviously an important financial topic, and we're here to help at every stage of the journey. Sounds like you've got a great handle on your credit cards. For someone who is still learning about using credit (and for many old pros as well), two cards is a great rule of thumb. As Alexa pointed out, this is the best bet for most people who are building or maintaining an excellent credit score.
We're not saying you should necessarily close your cards cards, but sometimes it is necessary. If so, we recommend closing no more than one per year.
I agree with Alexa's points on keeping fewer cards to stay better organized. Especially with the risk of identity theft, there's a lot to be said for streamlining our credit cards these days. However, if you feel comfortable keeping track of multiple cards and are paying your bills in full and on time each month, we don't think you need to start closing accounts. For most people, though, two cards is the way to go.
One more quick comment: Make sure to have an emergency fund in addition to (or better yet, instead of) your Citibank card.
Thanks again, kodemonki. I hope this has answered your question!
Since I have so many rewards cards and a couple retail credit cards (like J. Crew where I buy my suits for work but I pay off in full when I use them,) I don't like to carry them all the time. Instead, I have a separate fan-out credit card holder that I only take with my when I'm shopping specifically at those stores. That way I'm not tempted to go into those stores and shop on a whim just because I can. Also, along the line of keeping only one credit card in your wallet, I also keep the 800 number written down at home for the credit card I keep in my wallet in case it gets lost or stolen so I can easily call and deal with it.
Another important reason not to have so many credit cards is that with all the changes in credit card laws intended to protect consumers, many credit card companies have created “inactivity fees” if you don't use your cards often enough. With too many credit cards, it is hard to be sure you are using them all often enough not to get charged. Be sure to read through those pesky details sent by your credit card companies to see if they have initiated this type of fee.
I've always felt that I carry around way to much in my wallet (especially since it's a small zip pouch), but this post helped me to realize I do only carry around the necessities. After years of racking up discount cards and credit cards from various stores which only adding to my debt, I've simplified my wallet down to a few choice items – driver's license, student ID, debit card, credit card, medical/dental benefits cards, AAA card, Starbucks rewards card, Regal Cinemas rewards card, Rolls N Bowls rewards card (local sushi restaurant), and a various thin rewards punch cards for local businesses. I'm very bad about carrying cash (I only have $5 right now), but my favorite wallet item is my Bank of America check card book. My lower income doesn't always keep my checking account at a high balance, so I keep track of every cent, right up to the remainder rolled over with the Keep the Chance program. I recommend to anyone with past overdraft issues to find a small book for recording balances on the go; you never know when a birthday check written months ago is going to spring up and put your account into the negatives.
It did indeed, thanks! As for organization, I use Mint.com, which keeps track of all of my credit cards and when they're due and they send me email reminders (as do my credit card companies) so keeping track has never been an issue.
I do have an emergency fund, but I'm almost way too nervous to use it. The last time I had a mini emergency I ended up taking half out of play money and have from the emergency fund!
Thanks for all your excellent advice!
As a side note, the links in the emails for this thread don't work. http://disq.us/g7mr4 takes me to a page that doesn't exist.
Hi ArchiGator2005,
Thanks so much for sharing with us how you keep your wallet! If you want to be eligible to win a brand new wallet from Target, post your tips and a picture of your wallet to our Facebook page: http://facebook.com/learnvest
Best,
Raanah- LearnVest Social Media Intern
You're very welcome kodemonki. Keep up the great work you're doing managing your personal finances! If you have any other questions, you can always reach us at feedback@learnvest.com. We're here to help!
(Thanks for the side note about the comment link. We'll check that out.)
I love how organized you are. This is awesome.
I like this post but I want to caution/remind everyone on what happens if your wallet is stolen. Some of your cards are replaceable but many are not, especially gift cards (although Visa, Amex, etc giftcards can be registered many store cards cannot). You never plan on this happening but it does. I was mugged and had a wallet packed similarly to the one above and had several store gift cards in there. Now I keep the ones I use frequently like a Starbucks or Jamba giftcard with me and leave the others at home to bring when I plan on going to those stores. I also keep a list of my frequent travel member numbers in my phone as replacing the ones I had taken was time consuming. You never know what is going to happen so I would encourage you all to think about what is in your wallet and be sure that you would be okay with either going through the replacement process or never seeing again some of the items should your wallet ever be lost or stolen.
I'm usually caught without my retail credit cards, especially when I walk by The Gap that's having a great sale. I've discovered that the cashier can look up my account number via my phone number. I just need my ID then to prove who I am.