How Many Credit Cards Should I Have?

A woman holding multiple credit cards trying to decide how many credit cards should she have

Credit cards can be disastrous depending on the utilized amounts of credit and other factors. It’s a huge question; how many cards should you ideally have? Let’s dig into this question and how the number of credit cards you have might impact your credit score.

What to Consider When Determining How Many Credit Cards You Should Have

Your credit score is dependent upon many factors. It isn’t necessarily the amount of cards you have that impact your score, but how you use them. When deciding to open a new card account, there are three primary considerations.

Your Overall Credit Availability Increases

Every time you open a new credit card, the amount of available credit available should increase. Let’s say you have $10,000 in available credit on your credit card and are approved for a new, second card with a $1,000 credit limit; you just increased your available credit by 10%.

The Average Age of Your Credit History Has Changed

Your credit history has an average age that looks at how long all of your credit accounts have been in existence. That average age is loosely calculated by looking at the age of every credit account and averaging them. Every time a new account is opened, the average age of the credit accounts on your report declines.

You Have a New Account to Manage Responsibly

With every new credit card, you have the ability to accumulate more debt and more debt payments. Add up enough of those accounts, and the monthly burden could be significant if not properly managed.

Advantages of Having Multiple Credit Cards

The more credit cards you have, the more opportunities you have to show responsible credit use. Additionally, your available credit has increased, so your credit usage percentage has probably fallen. Credit Bureaus love to see little credit usage compared to the amount of credit you have available, as it indicates responsible credit management. If you have $10,000 of available credit but only carry $1,500 in balances, that’s a great indicator that you’re not using your cards irresponsibly.

Your credit card perks and interest rates could become more favorable as your credit score increases. With a new card, credit limits might increase, there could be no yearly fee, or you might earn travel rewards. As you add new cards with more favorable terms, consider keeping the old cards to maintain a longer average age of your credit, meaning it is better to have more cards as you take out new accounts than close the old accounts.

Multiple credit cards could be beneficial if they are responsibly managed and aren’t rapidly opened or closed. The high amount of available credit is excellent if little is used, and showing responsible payment histories is very favorable.

Risks of Having Too Many Credit Cards

Having too many credit cards comes with one risk that could destroy your credit. It all comes down to responsible use, and if you have a high amount of available credit and use a substantial amount of it, the results could be damage to your credit score and financial hardship.

Let’s take that same $10,000 in available credit and assume $9,000 has been used. The credit bureaus will look at this suspiciously and as poor credit responsibility. New lenders might wonder why you’ve had to use almost all of your available credit.

In addition to how the credit bureaus and new lenders view your credit use, the payments could be prohibitive in light of high credit card interest. If you’re making only minimum payments, the repayment time frame is exceptionally long while taking a chunk out of your monthly budget.

It isn’t the number of cards you have that is dangerous; it’s the number of cards that could be potentially used if you’re in a period of less than responsible credit management.

Tips on Managing Multiple Credit Cards

Your number of cards isn’t as significant as how you manage them. You could have five or twenty cards, but it always comes down to being responsible with your credit. That said, there are a few things to remember when managing multiple credit cards.

Keep Your Balances Low

The credit bureaus will look at how much credit you use versus how much you have available. Keep that percentage low. Staying below 30% is ideal.

Make Your Payments on Time

If you have many credit cards with balances, it can be difficult to remember when payments are due. Yet, only one late payment can have a very negative impact on your credit report. Set up automatic minimum payments on each card to ensure payment is never missed.


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