Is There Such a Thing as Too Many Credit Cards?

Is There Such a Thing as Too Many Credit Cards?

May 19, 2017

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Since the dawn of credit cards, man has struggled with one nagging question: Cash or credit? Some people claim you should ditch cards altogether to avoid debt, while others argue it’s smarter to responsibly use credit to rack up rewards. Regardless of your spending habits, most financial experts would say it’s a good idea to have at least one card to build your credit history.

Given the various credit cards available, it can be a challenge to narrow your options and find the perfect fit. There’s nothing preventing you from opening multiple cards, but this begs the question of how many credit cards is too many.

Unfortunately, there is no short answer. A 2014 Gallup survey found that the average American has 2.6 credit cards, though there’s no magic number of cards that will give you a perfect credit score.

The number of cards you carry largely depends on your credit history and financial responsibility. If you’re on the hunt for perfect credit, remember that how you use your cards is far more important than how many you have.

The Pros and Cons of More Cards

Like anything in life, opening new credit card accounts has advantages and disadvantages. It’s important to think through your options before submitting an application.

Managing more credit cards might sound like a burden, but it allows you to maximize rewards with every purchase. The higher credit limit also gives you added flexibility in case of emergencies. Considering credit utilization plays a significant role in your credit score, having multiple accounts and a higher overall credit limit can improve your score by lowering your utilization ratio.

However, it’s definitely possible to go overboard. If you’re not the most organized person, juggling a dozen cards can make it difficult to track your spending habits. It also becomes easier to miss due dates, which can absolutely crush your credit score — payment history accounts for 40 percent of VantageScore’s calculation. A wallet full of cards can make it tempting to spend beyond your means, racking up debt that you could spend several years paying down.

Scenario: Fixing Bad Credit

If you're trying to repair past financial mistakes and improve your credit score (or if you're brand-new to credit cards), carrying just one credit card is a great option.

You won't have to deal with the hassle of multiple due dates, which means your sole focus can be keeping your spending in check. Always pay your bills on time (and ideally in full), and consider setting up automatic payments so you have one less thing to worry about.

You might choose to open a second account once you’ve proven you can responsibly maintain one credit card, but it's best to give yourself a year or two to get used to the credit world before branching out.

Scenario: Proven Credit Card Pro

Have you successfully managed one credit card for several years and now feel ready to open another account? You could enjoy some great benefits.

Managing multiple credit cards means more rewards and buying power, but you must open accounts strategically to make the most of them. Think of it as diversifying your portfolio. You might already have a credit card that gives you cash back on all purchases, but a second card that provides travel and hotel rewards could provide a variety of benefits for different spending scenarios.

If you plan to take on debt soon — perhaps you’re planning to buy an engagement ring for that special someone — opening a card with 0 percent APR could be an inspired choice. Paying off debts using the 0 percent APR while using your rewards card for everyday purchases can save you from interest payments while making you money at the same time.

Scenario: Power User

If you're a credit card pro who has responsibly maintained multiple accounts for several years, more cards can offer even more benefits. You shouldn’t open new accounts without reason, but there isn't a limit to how many accounts you can manage as long as you're financially responsible.

You might use a rewards card for cash back on everyday purchases, a card that provides travel and hotel perks, a card for financing debt, and loyalty cards for your favorite retail stores, for example.

With great power comes great responsibility, though. You have to be incredibly diligent about budgeting and paying your bills on time, as even one missed payment can sink your credit score. As long as you’re able to keep an eye on your accounts and spend responsibly, the benefits of multiple cards undoubtedly outweigh the drawbacks.

The number of credit cards you carry is ultimately a personal decision. Being brutally honest about your level of financial responsibility is a crucial first step in deciding how many cards you can handle. Whether it’s one credit card, three cards, or a baker's dozen, carefully consider your spending habits and needs before picking the path that’s right for you.

On the market for a new credit card? Check out our suggestions for the best credit cards available.