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How Many Credit Cards Should I Have?

How many credit cards should you have? It depends on your credit goals and how you manage your spending. Here’s how multiple cards can impact your credit score.

Tim Moore • October 12, 2022

In This Article

  1. How many credit cards is too many?
  2. Is it good to have multiple credit cards?
  3. How many credit cards should I have to build credit?
  4. Credit card tips for beginners
  5. FAQs
  6. Multiple credit cards: A potential boost to your credit score

Determining how many credit cards you should have comes down to how you use them. If you’re good about paying off your cards each month and taking advantage of rewards programs, having multiple credit cards can improve your credit score and maybe even put a little cash in your pocket. In a pinch, you can use credit cards for emergencies or urgent purchases when you don’t have the cash in your account. 

But can you have too many credit cards, and are there downsides to juggling multiple lines of credit? Absolutely.

Read on to learn about the pros and cons of managing more than one credit card and how multiple lines of credit can impact your finances. 

How many credit cards is too many?

As nice as it would be to have a definite answer, the reality is that there’s no “perfect” number for how many credit cards a person should have. Everyone’s financial situation is different. To figure out how many credit cards you should have, consider your spending habits and ability to pay bills on time. 

The general consensus is that adults should have at least one line of credit, usually a credit card, to start building a credit history. So opening one credit card is a smart move, but justifying more than one will depend on you and your situation. 

Is it good to have multiple credit cards?

Having several credit card could be a good or bad thing. What matters most is how you use them and if you are paying your balances on time every month. If you’re a pro at managing your payments, you’ll find multiple benefits of having more than one credit card. But if you’re just starting your credit journey and struggle with on-time payments, multiple credit cards might make things harder.

Pros of having multiple credit cards

Confident you can stay on top of multiple payments and use your cards responsibly? Here are some of the advantages you might enjoy by opening multiple credit cards:

  • Different credit cards can offer you different kinds of rewards: Rewards such as cashback, points, or airline miles can make credit cards an attractive financial tool. Having an array of cards can allow you to earn the maximum available rewards on every purchase that you make.
  • Having cards across more than one network expands your spending power: If you only have an American Express, for example, you might not be able to purchase something from a retailer that solely accepts Visa.
  • You’ll have backup credit cards if one is lost, stolen, or compromised: In the last five years, nearly half of Americans have been victims of credit card fraud. Having other cards can come in handy if one is ever lost or stolen.
  • Having more than one credit card could improve your credit score over time: The more available credit you gain through multiple credit cards, the lower your credit utilization rate could be. A low credit utilization can positively affect your score. In fact, it’s the second-most important credit score factor after payment history.

Cons of having multiple credit cards

So is it ever bad to have a lot of credit cards? If you’re struggling to keep up with monthly payments, opening another credit card is probably a bad move for your finances. Here are some drawbacks to keep in mind:

  • More credit cards mean more payments to keep track of. When you have multiple credit cards with separate due dates, it can get tough to juggle. All it takes is one missed payment to hurt your credit score and rack up some high-interest credit card debt.
  • The illusion of spending power can be tempting. If you have multiple cards with their own credit limits, you might quickly realize you have access to thousands of dollars each month. But if you swipe those cards freely and don’t have the cash in a checking account when it’s time to pay up, you can swiftly fall into debt. Credit card APRs tend to be higher than most other lines of credit, which can make credit card debt difficult to handle.
  • Poorly managed credit cards can ruin your credit score. Missed payments, rising debt, and high credit utilization will result in a lower credit score. Having several credit cards might also make you look risky to lenders and could keep you from getting approved for additional lines of credit, like a car loan or mortgage, or approved for favorable interest rates.

How Many Credit Cards Does the Average American Have?

According to a 2021 survey by Experian, the average American has 3 credit cards and 2.3 retail store cards.

How many credit cards should I have to build credit?

If building credit is your main objective for opening multiple credit cards, you must first understand that having several credit cards can help, but also hurt, your credit score. The key factor is your credit utilization ratio, which is the percentage of your credit limit you are using. The more credit cards you have, the more available credit you have. 

For example, let’s say you have a credit card with a $3,000 credit limit, and you charge an average of $2,000 a month on your card. The amount of available credit you are using would be fairly high, around 67%, and a high credit utilization ratio can harm your credit score. But if you were to divide your $2,000 across several cards, each with its own $3,000 credit limit (or higher), you could easily keep your credit utilization ratio low. To improve your credit score, most credit experts recommend keeping your credit utilization under 30% of your available credit per card, though some even encourage less than 10%and under.

This ratio is just one of the factors that the FICO® credit scoring model takes into account when determining your score. This component makes up 30% of your credit score, but your payment history is weighted more heavily at 35%. So no matter how many credit cards you have, keeping your balances low and always paying your bills on time is what matters when trying to build credit.

Note: Opening a new credit card can lower your score by a few points due to the hard inquiry made on your credit report. 

Credit card tips for beginners

New to the world of credit cards? Spending with credit can be intimidating if you’ve heard horror stories. But if you’re ready to wield the power of a credit card responsibly, you can boost your credit score to make other big purchases, like a house or a car, more attainable. Check out our top tips for managing credit cards:

  • Educate yourself before applying. Knowing how credit cards work – everything from minimum payments to how they accrue interest – is important before actually opening one. Speak with a more experienced friend or family member for advice, or use online resources to learn more before applying.
  • Don’t apply for multiple credit cards at once: Each time you apply for a credit card, the lender will initiate a hard inquiry on your credit card. While one occasional hard inquiry won’t drop your score too much and will eventually fall off your report, having multiple, successive hard inquiries can deal a harder blow to your score – and be a red flag to lenders. So how often should you apply for a credit card? Experts say no more than once every six months.
  • Use reminders to stay on top of payments: Whether you have one or multiple credit cards, you’ve got to remember your payment date(s) each month. Use whatever resources are most helpful for you: smartphone reminders, calendar appointments, or even a good, old-fashioned daily planner. Some lenders may even let you schedule automatic payments, either for the minimum monthly amount or the full amount due. Just make sure you have enough money in your checking account to cover recurring payments.
  • Pay your card off each month in full: To avoid high credit card interest, aim to pay your card off entirely every month. That means you should only swipe your credit card if you’ve got the money elsewhere to cover the expense. The only exception? True emergencies. While it’s better to pay for car repairs and unexpected vet bills from your emergency savings, you might need to use your credit card to cover the full cost.
  • Start with a secured credit card: If you’re just starting to build your credit history, a secured credit card might be the way to go. Secured credit cards are backed by a security deposit, so you can never spend money that you don’t have – but they still operate as credit cards, making them a safe way to start improving your score.

FAQs

Is it bad to have a lot of credit cards?

As long as you handle your credit usage wisely, keep your credit utilization ratio below 30%, and keep track of payment due dates, having multiple credit cards isn’t a bad thing. Ultimately, it all depends on how well you manage the cards that you have. 

How do I choose the right credit card?

There are a ton of credit cards available to you, so choosing the best one will depend on what you are looking for and what you qualify for. 

Here are some things to keep in mind when shopping around for a new credit card: 

  • Credit score: Check your credit before you apply for a credit card to make sure you qualify. Most of the cards that offer the best rewards and perks are reserved for those with good or excellent credit, which is generally a score of 670 and above for FICO and a score of 601 and above for VantageScore.
  • Features: Think about what type of features you want in a card. Consider rewards, cashback, points, miles, insurance protections, 0% APR promotions, etc. 
  • Fees: Shop around for the lowest fees, such as annual fees, interest charges, late payment fees, and balance transfer fees.

Should I keep my old credit card accounts open?

If you’re considering opening new credit cards, it’s typically wise to keep some of your old accounts open. The length of your credit history accounts for 15% of your overall FICO Score, so instead of closing accounts, consider taking the cards out of your wallet and storing them somewhere else. It’s also good to have multiple credit cards, no matter their age, to keep your overall credit utilization low.

How often should you apply for a credit card?

Each time you apply for a credit card, a lender checks to see if you are creditworthy by generating a hard inquiry on your credit report. Each hard inquiry can ding your score by a few points, so it’s important that you strategically space out your credit card applications. The typical recommendation is that you should wait six months between credit card applications to prevent multiple hard inquiries from affecting your score.

Multiple credit cards: A potential boost to your credit score

Having multiple credit cards can be an effective way to improve your credit score, but how you use each card will ultimately determine its impact on your financial health. Before opening a new credit card, consider your spending habits, credit standing, organizational skills, and overall financial security.

If you’re new to building credit, immediately opening multiple cards may not be the best move. Instead, consider a secured credit card, like Chime’s Credit Builder Secured Visa Credit Card.¹ There are no monthly fees or interest, no credit check to apply, and no minimum security deposit required.² On average, members see a 30-point improvement in their credit score with Credit Builder.³

Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Chime Visa® Credit Builder Card and the Chime Visa® Cash Rewards Card are issued by Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see back of your Card for its issuing bank.

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1 To be eligible to apply for Credit Builder, you need to have received a qualifying direct deposit of $200 or more to your Checking Account within the last 365 days of your application. The qualifying direct deposit must have been made by your employer, payroll provider, or benefits payer by Automated Clearing House (ACH) deposit. Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, and cash loads or deposits are not qualifying direct deposits.

2 Security Deposit Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

3 Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

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