How Many Credit Cards Should I Have? How Many Is Too Many?
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Ever wondered how many credit cards you should have? It depends — there’s no magic number. If you’ve never used credit cards, just one is a great starting point, but if you know you’re great with credit, there’s no reason you can’t use several at once.
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How Many Credit Cards Should You Have?
If you don’t currently have any credit cards, we suggest starting with just one. If you’re more experienced, we suggest having two or more.
But the right answer for you really depends on your lifestyle, ambitions, and ability to be financially responsible. As long as you use them responsibly, you can benefit from using as many credit cards as you deem necessary (while maintaining excellent credit scores).
If you’re going to be irresponsible the right number of credit cards is zero.
A better question to ask is “How many credit cards do I need?”
If You’re New To Credit Cards
Start by applying for and using just one credit card, to learn how it works and to build credit.
It doesn’t have to be a rewards credit card, but you should generally go for one if you can get it. You may have to fall back to a secured credit card, but if you have good credit you’ll probably qualify for most cards on the market.
Then, once you know what you’re doing, consider expanding your credit card collection to earn more rewards and take advantage of more valuable benefits.
There are two primary reasons why we recommend getting a credit card if you don’t have one:
- The rewards, benefits, protections, and convenience of paying with credit cards
- The potential positive effects for your credit
Perhaps you’re young and new to credit in general, just starting to build up your credit history. Or perhaps you have a credit history established with good scores; you can qualify for the best cash back cards, but have never actually used a credit card.
Either way, exercise self-control with your spending. A credit card is not free money. You’ll need to pay for anything you charge to it. Treat it more like a debit card, which is attached to your bank account and needs to be paid off regularly.
If you don’t use your credit card responsibly, it won’t help you in any of the ways we describe in this post. Instead it will be a burden, something you wish you never applied for.
But don’t be nervous, it’s not too hard to be a responsible card user. It’s easier than driving a car.
Here are two great pieces of advice to guide you:
- Don’t buy anything you wouldn’t normally buy.
- Set up autopay for the full statement balance.
Automatic payments will ensure you always pay on time, which in our opinion is the most important factor for maintaining high credit scores. It will also let you avoid accruing interest on purchases, which will help you steer away from credit card debt.
The rewards and benefits of credit cards are pretty clear — they’re advertised just about everywhere. But the effects of your first credit card on your credit might not be so apparent.
Positive Effects on Credit
Having one credit card on your credit reports is generally better for your credit scores than having no cards, for several reasons:
- Good for account variety: Credit cards are revolving accounts, in comparison to installment loan accounts. Having some variety is good for your credit.
- Can show revolving credit utilization: Having a revolving credit line will let you show a low credit utilization ratio, which means higher credit scores (as long as you keep the balance low, of course).
- Adds a positive payment history: An additional record of on-time payments will improve your scores, and will help offset any late payments.
- Increases average length of accounts (eventually): A new card will initially decrease the average age of accounts, but over time it will help bring it up.
Negative Effects on Credit
There are some downsides to opening your first credit card. But if you’re only applying for one card the negative effects aren’t a very big deal, especially compared to the potential positive effects.
- A hard inquiry: Every credit card you apply for will require a hard inquiry on your credit reports. Each hard inquiry has a small negative effect.
- More new credit: More new credit accounts will bring down your scores, but this is temporary and “new credit” is a very small portion of FICO scores — only 10%.
- Reduces average age of accounts: A new account will bring down your average account age, but over time this effect will be reduced. Average age is another small factor in FICO scores — only 15%.
The actual effect on your credit scores will be based in large part on your particular credit history. Overall, the negative effects of opening a new credit card are usually quite small, and people typically don’t worry much about them.
Your first credit card might be exciting, and it’s normal to be a bit nervous that you could make a mistake. Some caution is a good thing. Soon enough you’ll feel more comfortable, and you’ll be making purchases, earning credit card rewards, and paying your cards off without a second thought.
If You’re Experienced With Credit Cards
When you understand how to use credit cards responsibly, there really is no limit to the number of cards you can have. The right number is simply whatever makes the most sense for you.
Without the right credit cards, you may be missing out on rewards and benefits that could save you some money and make your life more comfortable. Are you only earning 2% cash back on groceries, when you could be earning 6%? Are you flying all over the U.S., staring enviously at the closed doors of airport lounges? A better credit card could help.
With too many cards, on the other hand, you may feel overwhelmed or nervous about spending more than you can afford. If this sounds like you, it will probably be best to limit yourself to just one or two cards.
To give you some context, Experian’s State of Credit: 2017 report shows that the average American consumer has 3.1 regular consumer credit cards. That’s in addition to 2.5 retail store cards. FICO also reports that people with a FICO Score 8 of 800 or higher have an average of 7 cards on their reports, both open and closed. But that doesn’t mean you should aim for 7 cards — the number of cards they have is a result of their financial habits over decades, and remember that it’s only an average.
When it comes to personal responsibility, credit cards are a lot like cars. If you always drive safely, it doesn’t really matter how many cars you have or what car you’re driving. Having more cars doesn’t increase your risk.
But if you’re a reckless driver, giving scant attention to how cars work or the rules of the road, it doesn’t matter if you have one or 100 cars – you can do a lot of damage.
The same is true for credit cards. As long as you’re responsible with them, it doesn’t matter how many you have — they’ll help your credit, rather than hurt it. Actually, there are only a few situations in which it makes sense to ever close a credit card.
Overall, you should be comfortable with the number of cards you have. If you only need one card to get along just fine, that’s not a problem. But, if you can handle multiple cards, there are plenty of a few reasons why you might want to apply for more.
Even if you’re pretty satisfied with the cards you have now, you may find a great offer you could take advantage of. Some of the most attractive cards provide big signup bonuses and fancy travel perks, for example, which can put some cash back in your wallet or let you travel in style. Why not snag a load of bonus points when you can?
Why Should You Get More Credit Cards?
There are many good reasons to get additional credit cards. You can break most of those reasons and situations down into three categories:
- Alternative spending method: Retailers don’t always accept every type of credit card. Costco only takes Visa credit cards, for example, so if you don’t have one you’ll be out of luck (Costco does accept debit cards from other networks).
- Emergency backup: If one of your cards is lost or stolen, or you’re having a problem with the issuer, it’s good to have another payment method handy.
- Traveling in foreign countries: There’s a trend of more cards being accepted in more places, but when traveling abroad it’s often wise to have a card with Chip-and-PIN EMV technology.
- Separate business from personal spending: A business credit card can help you manage spending by keeping your personal expenses separate.
Saving Money and Improving Credit
- Establishing or rebuilding credit: When used responsibly, a new credit card can help you improve your credit scores over time.
- Decrease your credit utilization ratio: More credit cards means more available credit, which makes it easier to keep your credit utilization low.
- Avoiding foreign transaction fees: Most cards charge a fee on purchases in currency other than USD, but you can also find plenty of no foreign transaction fee credit cards.
- Pay off purchases at no interest: You can make purchases with a 0% intro APR card and take some time to pay them off.
- Balance transfers: A balance transfer credit card lets you move a balance away from a card with a high APR to one with a lower APR (preferably 0%).
Maximizing Value from Rewards and Benefits
- Earn more spending rewards: There are plenty of rewards cards that offer cash back or points for the types of purchases you make regularly. Are you earning as much back as you could be?
- Big signup bonus offers: You can find cards offering valuable signup bonuses, many of which range from $100 to $1,000 or even more.
- Frequent travelers can earn more rewards: Credit cards that are co-branded with airlines and hotels provide extra loyalty miles or points compared to normal purchases from those brands.
- Get credits for travel spending: Some travel cards offer annual credits you can use for travel expenses, like $200 per year for airline fees.
- Airport lounge access: If you spend a lot of time flying you should consider a credit card that provides airport lounge access.
- Airline or hotel member status: The higher-end travel cards often provide elite member status with a hotel chain, like Marriott or Hyatt.
- Point transfers: Have a favorite airline or hotel? Some travel cards will let you transfer points to a variety of loyalty reward programs.
- Travel and shopping protections: Almost every card comes with some shopping and travel protections, like Purchase Protection or Travel Accident Insurance. These can be good to have, just in case.
Why Shouldn’t You Get More Credit Cards?
There are quite a few reasons why you might want to get more credit cards. But there are also some important reasons why getting more cards won’t be a good idea.
- You don’t understand how credit cards work: Using credit cards ignorantly is a recipe for trouble. Take some time to understand what credit cards are all about.
- You’re going to pile on more debt: Don’t get more credit cards if you’ll just end up carrying a balance on them, accruing interest. Pay the full statement balance to avoid interest.
- You’ll miss payments: Payment history is very important, so only apply for a credit card if you plan to make the payment each month.
- You’ll have trouble managing multiple cards: If you have too many cards, you may lose track of which ones should be used for which types of spending.
- You’re enticed by a discount at the checkout lane: Many retail store credit cards tempt you with a discount as you make your purchase. But this isn’t usually the best time to apply for a new card.
- You’re worried about hard credit inquiries: Each credit card application’s hard inquiry will lower your credit scores a bit, so we don’t recommend applying for many cards in a short period of time, especially if you don’t know whether you have good odds of approval.
Overall, most of these problems can be solved or at least mitigated by better knowledge of how credit and credit cards work. If you’re responsible with your finances in general, without overspending, you probably don’t have much to worry about when it comes to credit cards.
How Many Is Too Many Credit Cards?
More credit cards are not necessarily better for your credit. But they aren’t necessarily bad for it either.
It’s more about how you use your cards, rather than how many you have. You won’t build credit faster with more credit cards — payment history is always counted month by month, no matter how many accounts you have.
There are both positive and negative effects on your credit when you open a new credit card. So you should only apply for new cards carefully and deliberately.
However, there is one big benefit that comes from having more cards: more available credit. The more cards you have, the higher your total credit limit. This makes it easier to keep your utilization ratio low, which is better for your credit scores. But you can mess this up by maxing out your credit cards, of course.
Learn more about the effects of multiple credit card accounts on your credit in our Q&A video below, with credit expert John Ulzheimer.
Check out a couple related videos, in which John Ulzheimer touches on many of the other topics mentioned in this post:
How Many Cards Can You Have Per Issuer?
After asking how many cards you should have, you might wonder: “How many cards can I have?”
In general, there is no limit to the number of credit cards you can have. Most credit card issuers let you apply for as many cards as you’d like, but there are some exceptions. Some issuers impose limits on the number of their cards you can get.
You can actually get duplicates of cards from most issuers as well, giving you even more options. But take note that signup bonuses are usually only available once every one or two years, or once per lifetime for American Express.
|Issuer||Max Number of Cards||Duplicates Available|
|American Express||4 credit cards; 10 former charge cards||Yes|
|Bank of America||No limit||Yes|
|USAA||No limit||Yes (potentially)|
|U.S. Bank||No limit||No|
|Wells Fargo||No limit||No|
Stop and Think Before Closing Credit Cards
We’ve discussed many of the reasons why you might want to apply for more credit cards. Now for a similar topic: why you shouldn’t usually close credit cards.
Why Should You Keep Credit Cards Open?
There are at least five reasons why you should typically keep cards open:
- Credit utilization: Having more cards makes it easier to keep your credit utilization low.
- Account age: Keep your cards open so they continue to age, increasing your average age of accounts and improving your credit scores.
- Account variety: If you close your only revolving account you’ll lose points in the FICO credit scoring system, for a lack of variety in your credit reports.
- A backup credit line: An extra line of credit could come in handy for emergencies.
- Useful rewards and benefits: Some cards may be worth keeping for the spending rewards or cost-saving perks you get.
If you close a credit card, your credit utilization may change significantly after your credit reports update. If you’re carrying a balance on any other cards, you’ll see your utilization increase. If you weren’t carrying a credit card balance there will be no change in utilization.
When it comes to account age, closing a credit card won’t have an immediate effect. That account will actually remain on your reports for ten years after it’s closed, and it will be included in the calculation for average account age throughout that time. But after that it will drop off your reports, and you’ll see your average account age change.
Why Should You Close A Credit Card?
There are some situations in which it makes sense to close a credit card.
- Fees are too high: Some cards have annual fees, and if you’re not getting enough value from them every year they should probably be closed.
- Problems with the card issuer: Maybe you’ve had unexpected fees from the card issuer, or have concerns about the way your payments are processed. Some cards are more trouble than they’re worth.
- You want another signup bonus: Some travel rewards cards have signup bonuses that you can get once every one or two years. You may want to close a card only to apply for it again later, to get another signup bonus.
If you’re trying to avoid the annual fee of a card by closing it, you may have another option. Some cards with annual fees can be downgraded to other card products, with either lower or no annual fees. The Chase Sapphire Preferred® Card (Review), for example, can be downgraded to the Chase Freedom Flex℠ (Review) or some other Chase cards.
This will let you keep the same account on your credit reports, where it will continue to help your utilization, account variety, and average age. You can contact your card issuer to ask if a downgrade is possible for your particular card.
Learn more about why you should generally keep cards open in our post, How Closing Credit Cards Could Hurt — Not Help — Your Credit.
So, how many credit cards should you have? There is no magic number or perfect answer. The right number of cards for you depends on your lifestyle, your finances, and what you plan to spend money on.
Buying lots of groceries or gas? Paying hundreds of dollars for travel every year? Trying to pay off a balance at a lower interest rate?
It makes sense to have a separate credit card for each of these situations. It might even make sense to have more than one for each case, depending on what you tend to buy and how much you spend.
The key is to use your credit cards responsibly, no matter how many you have.
Your credit scores can improve simply from having one credit card on your reports, all other things being equal. More credit cards after that won’t necessarily give you better credit scores, although they can make it easier to keep your utilization low. And don’t forget about all the benefits of having multiple cards that aren’t related to your credit scores.
How many credit cards do you think a person should have? How many do you have? Let us know in the comments below!
Whether you’re looking for your first card or your fifteenth, check out our picks for the Best Credit Cards to find the right card for you.
Brendan has been writing about personal finance for over eight years, and is now taking on the challenge of bringing high-quality credit education to the masses. He makes sure that Credit Card Insider is covering the most important credit topics transparently and precisely, and that we have up-to-date reviews of credit cards so you can find cards that are right for you.
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