How Many Credit Cards Is Too Many

How Many Credit Cards Is Too Many

There is no specific number of credit cards a person should have. However, owning two to three active credit card accounts is generally recommended. Your number of credit cards depends on your finances, financial goals, credit history, and spending habits.

Some people prefer the flexibility of owning more than one card, while others think it may lead to overspending. Remember that how you use your credit cards is more important than the number you own.

Should you Have Multiple Credit Cards?

You can have multiple credit cards and other types of credit if you are financially responsible. Also, multiple credit accounts do not affect your credit score. Having several accounts is good if you aim to get a good credit score.

Two or three credit accounts, in addition to other loans, are ideal for credit scoring and will help improve your credit mix. Having few credit accounts makes it hard to maintain a high score, and lenders or creditors may view this as riskier. A blend of credits suggests to lenders that you are financially responsible and know how to manage your loans. In addition, more credit cards may help you maintain your credit utilization rate low.

Potential Effects of Multiple Credit Cards on your Credit Score

Having several credit cards can impact your credit scores by lowering your credit utilization rate. Credit utilization rate is one of the significant factors in your credit scores. It is the total credit card amount you spend compared to the credit limit available. The closer the ratio is to zero, the better it impacts your credit score. Most lenders prefer a debt utilization rate of below 30 percent.

When you get a new credit card, you increase your credit and lower your credit utilization rate. On the other hand, closing an account could increase your utilization rate and hurt your credit scores. However, if you have trouble paying your existing credit card debt, closing an account could save you deeper financial problems though it will dip your credit scores.

Benefits of Having Multiple Credit Cards

As long as you make all your credit card payments on time and keep your card balances low compared to your limit, you will enjoy:

Access to reward programs

Multiple credit cards can give you access to several reward programs. For example, some cards will provide you with cash back rewards, while with others, you get travel perks. In most cases, one card will not have all these features. So it becomes reasonable to have separate credit accounts with different reward types.

Separation of expenses

Having multiple credit cards helps you separate your expenses. For instance, you can have one card for all job-related costs and another for your other expenses. It even gets easier for your employer to reimburse you for work-related expenses with a credit card statement.

Improved credit score

A new credit card will increase your credit limit and credit utilization ratio if your spending remains the same. This is because credit utilization is critical in determining your credit score.

They come in handy during the mortgage application

Multiple credit cards will increase your credit score if you are looking for a new home. Most lenders need at least three active credit accounts for a conventional mortgage.

Potential Problems of Having Multiple Credit Cards

Owning two or more credit cards can be challenging too. Some of the potential issues include:


Having multiple credit cards can encourage overspending. After all, when someone opens a new credit card, they will likely use it.

Your credit score can dip

Every credit card application can hurt your credit score through “hard inquiry.” However, the score can recover quickly if you use your card responsibly. Also, lenders interpret the application for multiple credit cards within a short period as a credit risk sign.

Challenge managing several credit accounts

The more credit cards you have, the more credit limits and due dates you have to keep track of. One solution is automating monthly or setting your due dates on the same day.

Vulnerable to identity theft

Though it rarely happens, no financial institution can say they are immune from identity theft. Having multiple credit cards exposes you to fraud.

How to Manage Multiple Credit Cards Successfully

Before opening another credit account, you should consider how well you manage your credit cards. It would help if you also understood that you would lose available credit and credit history when you close an account.

One effect of canceling your card is that it might affect your credit score. But, it is better to have your credit score decrease instead of carrying debt you are struggling to pay. If you cannot pay off your monthly balances, stick with only one card or cut down your expenses.

Before applying for more credit cards, ask yourself the following questions and answer them honestly:

  • Can I afford to pay multiple balances?
  • Do I have experience using several credit cards?
  • Will I use the card sufficiently to justify my application for it?

The Bottom Line

Having multiple credit cards has many benefits, but only if you are responsible. Before applying for another credit card, determine your ability to pay off multiple monthly balances and know your expenses.

Financial situation and credit needs differ from person to person, so there is no set rule on how many credit cards are too many. Instead, what’s important is to manage your credit cards responsibly.

Mark Jorel Snow

Mark Jorel Snow brings over 15 years of financial experience to help everyday people master their money. Mark is passionate about making complex financial topics simple. His down-to-earth explanations empower readers to take control of their finances with confidence. Mark specializes in creating tailored money strategies and providing unmatched personal support. When he's not coaching clients or penning his latest article, you can find Mark enjoying nature and time with family.

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