How Many Credit Cards Is Too Many? The Ideal Number Is…

how many credit cards should one have

How many credit cards is too much? Many consumers are willing to find the right answer to this question. 

In fact, there is no “right” answer on what the difference is between a multiple credit card holder and a single cardholder. It all depends on your current financial situation, your monetary needs, level of responsibility, as well as finance-related goals for the future.

Those who have already experienced issues with repaying the debt may suggest that having several credit cards are too many, while those who have extra financial needs might require another card straight away. 

There are benefits and drawbacks to having too many credit cards. Keep on reading to find what factors affect this decision and how many cards should a person have to avoid issues.

How Many Credit Cards Can You Have?

Let’s dive right in and discuss if there is a one-size-fits-all answer to the question if it is bad to have multiple cards. 

It is necessary to admit that there are 377 million open credit card accounts in the USA in 2020, mentions the American Bankers Association

There are advantages and drawbacks to having a lot of cards. One thing is true – it can either boost or lower your credit rating depending on how you manage the debt.

Speaking of high score holders, people with a credit rating of over 780 own approximately six or seven cards. This includes both closed and open accounts. 

Is it good to have multiple cards if you want to have a great credit rating?

Ethan Dornhelm, vice president of FICO Scores mentions that there is no single correct answer. The credit rating is an individual score that defines if you can qualify for a lending solution, or determines the interest rate for a certain lending solution.

“Just the number of credit cards itself isn’t as important as the ability of consumers to keep track of their finances and manage all of their accounts,” mentions Dornhelm.

Can you have too many cards?  In case you keep your balances low and always repay the bills on time and in full, you won’t have any problems with having several cards at once. And such activities are more essential when defining your FICO score and ability to qualify for better lending solutions.

Is It Bad to Open Multiple Credit Cards?

Financial coaches estimate that high credit holders have on average three cards. If we add up the number of closed cards, the total number will be around six. 

As you can see, there is nothing wrong with having several cards at once provided that you utilize them responsibly. The number depends on the results you want to achieve and the rewards you want to obtain. 

Consider the following things before you decide how many cards you can have before it hurts your credit.

  • Taking another plastic can boost your credit. It is made by lowering your debt utilization ratio. So, if you need to improve your rating you may want to add a new card. Having a lot of credit cards with zero balance isn’t helpful but adding a new one will lower your debt utilization ratio to a minimum (experts suggest you should keep it as low as 30%). Provided that your spending remains the same, opening a new plastic will increase the total credit limit and decrease the ratio.
  • Is it good to have a lot of credit cards closed? No, it can hurt your profile. Even if you decide an ideal number of cards for you is more than one, don’t hurry to close the old ones. Remember that the age of your accounts matters, so closing old cards may lower the average age of the account. Moreover, this action might hurt your credit rating as well by removing a part of your available credit.
  • Should I have more than one credit card? Yes, if you want to get additional benefits. For instance, many holders apply for special rewards and bonuses. Certain spending categories offer perks and cash back system as well as other discounts on various purchases. Thus, the number of credit cards you should have to improve your score depends on your current needs. If you want to receive additional perks and bonuses, it pays to open a new account and get those rewards. Don’t forget to learn about the annual charges though, so that you are sure it’s worth it.
Which one of these primarily influenced your decision to choose your specific card?

Numbers Matter

If having several cards at once makes you less organized and you forget to pay the balance in full on a monthly basis, your credit rating may lower significantly.  

The number of cards you should have for good credit depends not only on the actual number but also on the level of your responsibility and the amount of available credit you actually utilize. In case you use less credit, it can assist you in improving the score.

How many credit cards does the average American have? About three open cards as well as three closed ones.

is it bad to have multiple credit cards

Bear in mind these things before you decide how many credit cards you should have open.

  • Credit utilization ratio. This is the part of the credit limit on your card that you really utilize each month. It can be approximately one-third of the total credit score or higher. Is it bad to have two cards? If you keep these balances at 30% or lower, it’s not a problem. In theory, you can open a new card and that will lower your utilization ratio.
  • Credit age. It’s no surprise that lenders are always willing to check your credit age before they make any lending decision. The same applies here. How many credit cards should you have to build credit? If your credit history isn’t long enough or it’s non-stable, you may have issues with applying for lending solutions. It may not be enough to have one account you’ve closed several years ago. Your credit age should be decent and steady as it will affect your credit rating in general.
  • The payment history. This feature defines approximately 65% of your credit rating. This way, it’s much more essential to always repay the debt on time rather than just open multiple cards.

Should I have multiple credit cards?

All in all, the number of accounts you have depends on your own self-organization skills as well as on the ability to manage your finances and handle several cards at once. 

If your aim is to boost the credit profile and improve your rating, then it makes sense to open a new account. The following useful habits can help you improve the credit history as well:

  • Try to utilize credit to a minimum and keep a utilization ratio below 30% if possible.
  • The number of cards the average person has depends on the ability to keep track of personal finances. Don’t open a new account unless you really need to do it.
  • Always repay the debt on time, pay the balance in full each month, and never accumulate debt.
  • Can you have two credit cards from the same bank? Yes, if they offer various benefits and cash back. However, don’t apply for a new plastic too frequently as having hard credit pulls may affect your rating and lower it.

How many cards should I have for good credit? Hopefully, now you can answer this question and follow the above-mentioned tips to find the best solution in your situation tailored to your unique financial needs.

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