Highlights:
- It's generally recommended that you have two to three credit card accounts at a time, in addition to other types of credit.
- Remember that your total available credit and your debt to credit ratio can impact your credit scores.
- If you have more than three credit cards, it may be hard to keep track of monthly payments. Missing payments can result in fees and lowered credit scores.
There's not a one-size-fits-all solution for the number of credit cards a person should own. However, it's generally a good idea to have two or three active credit card accounts, in addition to other types of credit such as student loans, an auto loan or a mortgage.
Just remember: The number of credit cards you own is less important than how you use them. Be sure that you can keep up with your existing monthly payments before considering a new credit card.
Is it good to have multiple credit cards?
Having multiple credit cards, along with other types of credit, can be a good thing, as long as you use each one responsibly.
Two factors that contribute to your credit score are the number and type of credit accounts. If your goal is to get or maintain a good credit score, two to three credit card accounts, in addition to other types of credit, are generally recommended. This combination may help you improve your credit mix.
Lenders and creditors like to see a wide variety of credit types on your credit report. Keeping up with multiple credit accounts suggests to lenders that you understand how credit works and know how to manage the amounts you borrow.
Many credit cards also offer borrowers access to special rewards programs. These might include cashback options for certain purchases, travel benefits or other types of rewards.
How multiple credit cards affect your credit score
Having multiple credit cards can indirectly impact your credit scores by lowering your debt to credit ratio—also known as your credit utilization rate.
Your credit utilization rate is the amount of credit you use compared to the total credit available to you. Lenders usually like to see a credit utilization rate below 30 percent. A rate higher than 30 percent may negatively affect your credit scores.
When you open a new credit card, you increase the total credit available to you. That means you'll be able to spend more before hitting that 30 percent credit utilization rate. If your rate is already at or above 30 percent, opening a new card could improve your credit scores by lowering your credit utilization rate.
However, the most important thing to do with multiple credit cards is to keep up with what you owe. Be sure to monitor how much you spend on each credit card and the payment due dates so that you don't go into credit card debt, pay high interest rates or get charged fees for missing a payment. It's also a good idea to pay off your credit card balances in full each month instead of only making the minimum payment.
Issues with having multiple credit cards
Despite the potential benefits, owning multiple credit cards is not without its downsides. The biggest risk is that you can easily spend more in credit than you're able to repay in cash. Plus, keeping track of multiple credit cards — all with different interest rates, due dates, minimum payments and other fees — can become overwhelming.
Additionally, charge offs, late payments and high credit utilization rates can create negative marks on your credit reports if you are not careful.
Before opening a new credit card account, be sure that you're ready for the additional financial responsibility. Keep an eye on your spending habits and find ways to organize your finances.
How often should you apply for a credit card?
It's true that keeping multiple credit cards can sometimes benefit your credit scores. But that doesn't mean you should apply for more credit than you can reasonably use.
When you apply for a new credit card, a lender will request a copy of your credit report from one or more of the nationwide consumer reporting agencies (Equifax, TransUnion and Experian) as part of the application. This process is known as a hard inquiry. Too many hard inquiries over a short period of time can be a red flag to lenders and lower your credit scores.
Why? Because applying for multiple credit cards may suggest that you're spreading yourself too thin and taking on more credit than you can reasonably repay.
Apply for a new credit card when you feel it makes sense for your overall financial situation.
How many credit cards are too many?
Owning more than two or three credit cards can become unmanageable for many people. However, your credit needs and financial situation are unique, so there's no hard and fast rule about how many credit cards are too many.
The important thing is to make sure that you use your credit cards responsibly.
Here are some things you should remember about credit, especially if you have multiple credit cards:
- Keep an eye on your balances.
- Avoid late payment fees by paying on or before the due date.
- If possible, pay off your credit card balances in full instead of only making the minimum payment.
- Check your credit reports frequently so that you see what lenders see.
With a free myEquifax account, you can check your Equifax credit report. You can get free credit reports at annualcreditreport.com.
FAQs
It's generally recommended that you have two to three credit card accounts at a time, in addition to other types of credit. Remember that your total available credit and your debt to credit ratio can impact your credit scores. If you have more than three credit cards, it may be hard to keep track of monthly payments.
How many credit cards is it reasonable to have? ›
Credit bureaus suggest that five or more accounts — which can be a mix of cards and loans — is a reasonable number to build toward over time.
What is the 15 3 rule for credit cards? ›
The 15/3 rule, a trending credit card repayment method, suggests paying your credit card bill in two payments—both 15 days and 3 days before your payment due date.
Is 12 credit cards too many? ›
So, while there is no absolute number that is considered too many, it's best to only apply for and carry the cards that you need and can justify using based on your credit score, ability to pay balances, and rewards aspirations.
Is 7 credit cards too many? ›
Too many credit cards for most people could be six or more, given that the average American has a total of five credit cards. Everyone should have at least one credit card for credit-building purposes, even if they don't use it to make purchases, but the exact number of cards you should have differs by person.
Is it OK to have 7 credit cards? ›
Having different credit cards is fine as long as you have good management of them. Avoid reaching the credit limit on these cards so that your utilization rate stays low. Maintain good financial habits, such as keeping away from carrying a balance from month to month. Thus your credit score will remain in good numbers.
How much can I borrow with a 750 credit score? ›
You can borrow $50,000 - $100,000+ with a 750 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
What is the golden rule of credit cards? ›
The golden rule of credit card use is to pay your balances in full each month. “My best advice is to use a credit card like a debit card — paying in full to avoid interest but taking advantage of credit cards' superior rewards programs and buyer protections,” says Rossman.
Is 20 credit cards bad? ›
There is no right number of credit cards to own, and owning multiple cards gives you access to different rewards programs that various cards offer. Owning five cards, for example, would give you a bigger total line of credit and lower your credit utilization ratio.
What is the 12 month rule for credit cards? ›
2/3/4 Rule
You can be approved for up to two new credit cards every rolling two-month period. You can be approved for up to three new credit cards every rolling 12-month period. You can be approved for up to four new credit cards every rolling 24-month period.
Closing a credit card could lower your credit score. That's because it could lead to a higher credit utilization ratio, reduce the average age of your accounts and hurt your credit mix. Before closing a credit card, it's wise to consider these factors and the potential impact on your credit score.
Is 10 credit cards a lot? ›
It would depend on your age. Typically, having to much available credit doesn't hurt you. But, 10 credit cards is a lot. Depending on what your scoring factors are, I'd consider closing out a couple of your youngest accounts.
Is it bad to have 10 credit cards? ›
While it is not inherently bad to carry multiple cards, cardholders need to know what their own limitations are and what they can handle. It can be difficult to manage payments for multiple credit cards at once.
Is it bad to have a lot of credit cards with zero balance? ›
However, multiple accounts may be difficult to track, resulting in missed payments that lower your credit score. You must decide what you can manage and what will make you appear most desirable. Having too many cards with a zero balance will not improve your credit score. In fact, it can actually hurt it.
Is it better to cancel unused credit cards? ›
Canceling a credit card will cause a direct hit to your credit score, so more often than not, you'll want to keep the account open. Correctly managing an open, rarely-used account may require some extra attention, but the added effort will help your credit in the long run.
Is a 700 credit card good? ›
The credit card ranges using the FICO scoring model are: Exceptional: 800-850. Very good: 740-799. Good: 670-739.
How many credit cards do the average person have? ›
How many credit cards does the average person have? According to the latest figures from Experian, the average American has 3.84 credit cards with an average credit limit of $30,365.
Are 4 credit cards too many? ›
There is no right number of credit cards to own, and owning multiple cards gives you access to different rewards programs that various cards offer. Owning five cards, for example, would give you a bigger total line of credit and lower your credit utilization ratio.
How many credit cards are considered too many? ›
There's no set rule on how many credit cards are too many as it depends on several factors, like credit health, age, income, and utilization ratio. That said, having too many can negatively impact your credit health because keeping track of your payments can be hard.
Is it normal to have 4 credit cards? ›
While Experian found that the average American has four cards, you may be better off with fewer or more — depending on how you use them. If you already have a few credit cards and are interested in opening another, you may wonder if there's an ideal number of cards to have.
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