August 15, 2018

How Many Credit Cards Should You Have?

Written By Mary Beth Eastman
Last updated September 4, 2019

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Each of your credit cards tells a story. The first one may date to college, the second you may have gotten as a newlywed under both of your names and the third is for your favorite store that you discovered two years ago. Now you’re about to sign up for a fourth — but wait. Is four too many?

There are a few guidelines to keep in mind when determining how many credit cards you should have. For example, consider factors such as your ability to use credit responsibly, your credit score and your credit limit.

Many Americans have three or four cards, and there doesn’t appear to be any relationship between your credit score and the number of cards you have. Of course, the best credit cards can lead to benefits such as:

Carrying a load of cards has its share of potential pitfalls too. For example:

  • Spending money you wouldn’t have otherwise
  • Paying more in the long term on interest charges
  • Using cards regularly to avoid an account being closed due to inactivity
  • Shortening the average age of your credit history if you open new cards often

With these pros and cons in mind, what’s the magic number you might come up with?

One or two credit cards should be your limit if you have issues with overspending or with keeping things organized.

Otherwise, three or four credit cards should do nicely. They’ll boost that credit utilization ratio because you have lots of available credit and give you a nice mix of rewards. Do try not to use more than 30 percent of your available credit (so, $3,000 if your credit limit is $10,000).

If you’re a pro at paying balances off and keeping track of your cards, then you can try your hand at having more than four cards. Do avoid opening new accounts just for the heck of it. For example, if there’s a new card that offers rewards that seem tailor-made for you, why not go for it? On the other hand, if you want more cards just so you can spend more money, you might set yourself up for a cycle of debt. Before getting a new credit card, ask yourself which sounds more like you.

One more thing: If you plan to apply for an online loan, say a mortgage loan or car loan, avoid putting in for a credit card if possible. Too many credit applications coming in at the same time can lead to temporary but noticeable drops in your credit score.

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