Categorical Variables and Cardinality

One approach to deal with categorical variables is One-Hot Encoding.
But there is an important thing to keep in mind when using it.
Cardinality and it means the number of unique values in a column.

It's always better to create a one-hot encoding for columns with lower cardinality because in a large dataset one-hot encoding can expand the size of the dataset.

High cardinality columns can either be dropped from the dataset, or we can use label encoding.