How Many Credit Cards Should I Have?

person in pink shirt holding multiple cards and pressing with a finger on a calculator

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Having multiple credit cards can benefit your finances, as long as you manage them responsibly. There's no simple answer for the ideal number of cards to have since financial wants and needs vary greatly from person to person.

Here's what to keep in mind as you decide whether or not to add more cards to your wallet.

How Many Credit Cards Should You Have?

The average American has 3.84 credit card accounts, according to Experian data. But there's no one-size-fits-all answer to how many you should have.

It's important to consider both the advantages and disadvantages of using more than one credit card and how multiple cards can improve or worsen your financial situation and credit history.

What Are the Benefits of Having Multiple Credit Cards?

There are several ways using more than one credit card can benefit you. Some of the reasons include:

  • Increase your available credit. The second most influential factor in your FICO® Score is your credit utilization, or the percentage of available credit you're using on your credit cards and other revolving debt. The lower your utilization ratio, the better for your credit scores. With each new credit card you add, you're increasing your available credit, which can drive down your utilization ratio—as long as you don't increase your spending.
  • Maximize your rewards. If you're a credit card rewards enthusiast, using multiple credit cards can make it easier to maximize how much you earn in cash back, points and miles. For example, one card may offer excellent rewards on dining but not on groceries or gas. Having more than one card gives you the chance to get more rewards than if you were to make all your purchases with one card.
  • Take advantage of other perks. Some credit cards offer benefits beyond their rewards program. For example, you may be able to use a new card's introductory 0% APR promotion to do a balance transfer or finance a large purchase. Or, you could take advantage of generous benefits you can get from travel credit cards, such as introductory bonuses that can earn you tens of thousands of points or miles.

What Are the Risks of Having Multiple Credit Cards?

Although there are some clear benefits, having several credit cards at your disposal can do more harm than good if you're not careful. Here are some potential pitfalls to keep in mind:

  • You may be tempted to overspend. As you gain access to more available credit, you increase the amount of credit card debt you can acquire. If you've had issues with overspending in the past, high credit limits could encourage a return to bad habits. If this is the case, fewer credit cards may be better, or even none at all. A good way to limit your spending is to treat your credit card like a debit card, only spending what you can afford to pay off every month. Also, it's always a good idea to create and follow a budget to avoid overspending on things you don't need. Finally, make it a goal to pay your bill in full every month to avoid interest charges.
  • Organization can be tough. With many credit cards in your rotation, it can be difficult to keep track of all the due dates and balances. If you accidentally miss a payment, you'll be slapped with a late fee and possibly also a penalty APR, which increases the cost of the debt. It can also damage your credit if you're late by 30 days or more. Fortunately, some card issuers allow you to change your due date, so you can keep them all on or about the same date. Also, setting up automatic payments can help you avoid late payments. Just make sure you always have a buffer in your checking account to avoid overdrafts or returned payments.
  • It can get expensive. If you have a lot of cards with annual fees, it can get expensive to hold on to them year after year. Make sure you're getting enough value from each card to make up for the annual cost.

How to Choose the Best Credit Card

There's no single best credit card on the market, so it's important to know yourself and what you want to find the best fit. Here are three factors to help you determine which credit card to get:

  • Credit score: Most rewards cards require good or excellent credit, which starts at a FICO® Score of 670. Check your credit before you apply to make sure you qualify. If your score is under that threshold, consider cards suitable for fair credit or poor credit.
  • Spending habits: As you compare rewards cards, understand where you spend most of your money to ensure that you maximize how much you earn.
  • Preferences: Think about whether you prefer the simplicity of cash back or the potential value of a travel card. Also, consider your preferences regarding annual fees and other features that make one card more valuable to you than others.

How Multiple Credit Cards Affect Your Credit Score

Each time you apply for a new credit card, the card issuer will run a hard inquiry on your credit reports. Each new inquiry typically knocks fewer than five points off your credit score, but if you apply for multiple cards in a short period, it could do more damage and raise red flags on future credit applications.

As previously mentioned, having multiple cards can also decrease your credit utilization ratio, which can have a positive impact on your credit score—as long as you don't increase your spending. If you get a new card only to max it out, though, it could hurt your score rather than help it.

Finally, your payment history is the most important factor in your credit score, and if you make all your payments on time across multiple accounts, that can be a plus. However, if you struggle with staying organized and miss a payment by at least 30 days on one or more of your cards, it can hurt your credit.

If you're considering multiple credit cards, it's typically wise to keep your old accounts open. Closing old cards can potentially lower your credit scores as it reduces your available credit, which could cause your utilization ratio to jump. Instead of closing accounts, consider taking the cards out of your wallet and putting them somewhere safe. To keep the account active, it's a good idea to put a small recurring charge on it and pay off your bill every month. Keeping the account active can help prevent a card issuer from closing your account or reducing your credit limit.

Get Prequalified for a Credit Card Based on Your Credit Profile

It can be challenging to find the right credit card, especially if you're not sure you qualify based on your credit score. With Experian CreditMatch™, you can compare credit cards that you have a good chance of getting approved for based on your credit profile. While a prequalification doesn't guarantee approval, the process can give you a good idea of your odds.

If the credit cards you want are out of reach, you might want to take the time to address the risk factors in your credit. Free credit monitoring through Experian can help you keep an eye on your credit as you take strides toward improving it.