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How Many Credit Cards Should I Have?

Opening multiple credit cards can be advantageous for some and damaging for others. Here’s what you need to know before you open another line of credit.

Katana Dumont • February 8, 2022

There are many reasons to open a credit card. Credit cards can be used for emergencies or urgent purchases when you don’t have the cash in your account. They’re also a great way to build your credit — and some even offer rewards on purchases.

But how many credit cards are too many? And is there a “perfect” number of credit cards you should be striving for? 

Read on to learn more about opening multiple credit cards, and how it can either be beneficial or detrimental for you and your finances. 

In This Article

  1. How Many Lines of Credit Should I Have?
  2. Is It Good to Have Multiple Credit Cards?
  3. How Many Credit Cards Should I Have to Build Credit?
  4. FAQs
  5. Final Thoughts

How Many Lines of Credit Should I Have?

As nice as it would be to have a definite answer to this question, the reality is that there’s no “perfect” number for how many lines of credit a person should have. Everyone’s financial situation is different. To figure out how many lines of credit are too many or too few for you, 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 cards isn’t necessarily a good or bad thing. What matters most is how you use them and if you are paying your balances on time every month. That being said, there are advantages to having multiple credit cards. Consider the following:

  • Different credit cards can offer you different kinds of rewards: Rewards such as cashback, points, or airline miles are incentives to opening a new credit card. Having an array of credit cards can allow you to earn the maximum available rewards on every purchase that you make.
  • Having cards across more than one network can be beneficial: If you only own an American Express card, for example, you might not be able to purchase something from a retailer who solely accepts Visa.
  • You’ll have backup credit cards if one is lost, stolen, or compromised: To prepare for a situation where you can no longer use one of your credit cards, having others to use can come in handy.
  • 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, which can positively affect your score.

Just as there are advantages to having more than one credit card, there are also disadvantages to keep in mind. More credit cards mean more payments to keep track of, which can lead to missed payments, rising debt, and could potentially result in a lower credit score. The more credit cards you have might also make you look risky to lenders and can hinder you from getting approved for additional lines of credit, like for 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, the first thing you need to understand is that having several credit cards can help, but also hurt, your credit score. The key factor here is your credit utilization ratio, which is the percentage of your credit limit you are using. This means that the more credit cards you have, the more available credit you have to work with. 

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 divvy out your $2,000 across several cards, then 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 other experts really encourage 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. 

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, balance transfer fees, and so on.

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. 

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 6 months between credit card applications to prevent multiple hard inquiries from affecting your score.

Final Thoughts

If you’re thinking of opening another credit card, carefully consider your spending habits, credit standing, organizational skills, and overall financial maturity. If building credit is your main motivator for opening a credit card, consider opening a secured credit card. Secured credit cards can be a great starting point when you’re trying to establish or build your credit score. In fact, Chime offers a Credit Builder Secured Visa® Credit Card¹ exactly for the purpose of building and improving credit. 

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