How Many Credit Cards Should I Have?

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Last updated on December 3, 2021 Comments: 2

More than two cards might seem excessive to some, while others will open several new credit cards every year. Using multiple cards could help you save by letting you score the best terms for each transaction, but it could also land you into big trouble — think expensive interest charges, overspending, and missed payments.

Today, we share the inside scoop on the right number of credit cards to have as well as answer some of your frequently asked questions. Let’s dive in!

What’s the Right Number of Credit Cards to Have?

The right number of credit cards translates into the number of cards you need to function efficiently. For most people, however, the right number is one credit card. This is particularly essential for cardholders who take advantage of credit card rewards programs — the juice might not be worth the squeeze when you own multiple credit cards. The number holds even more water if you’re carrying debt.

How Do I Know If I Have Too Many Credit Cards?

How Do I Know If I Have Too Many Credit Cards?

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Unfortunately, there’s no one right answer. What’s too many for you might be reasonable for someone else. Even so, here are a few ways you can decipher whether you’re carrying too many credit cards.

You Can’t Track All Your Payments

If it’s proving difficult to keep track of when payments are due and how much interest you’re paying, you’re carrying too many credit cards. Holding multiple credit cards makes it difficult for you to maintain the cash needed to pay off every card on time. A single missed payment and your credit score could take a blow, and could also land you in credit card debt.

As soon as you find yourself missing out on a credit card payment due to the dates, you should take a look at how many cards you have and see if you can go without any of them.

You’re Paying Too Many Annual Fees

Most credit cards attract an annual fee, some of which could add up to several hundred dollars per year. While this may be worth it if your cards are earning lucrative rewards, it could equally be a waste of money if you’re forking out fees for cards you barely use.

You’re Not Getting Approved for New Applications

Are you itching to apply for that tempting sign-up rewards bonus but are afraid you won’t get the nod? Or you actually go ahead and apply but you’re denied for some reason? Well, the chances are that your credit card issuers think that you already carry enough credit either with them or overall. Some issuers also place a limit on the number of credit cards you can own. Once you hit their limit, you’ll need to cancel one card to get approval for a new one.

Your Debt-to-Income Ratio is High

Lenders use your debt-to-income ratio when evaluating your ability to accommodate more debt. Generally, this figure weighs your monthly debts against your monthly income. A higher debt-to-income ratio (over 43%) tells lenders that you’ll probably have a difficult time keeping up with monthly payments. The more credit cards you carry, the higher your chances of carrying more debt, which may translate into a high debt-to-income ratio.

When Should You Get an Extra Credit Card?

When to Get Another Credit Card

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While we advise against signing up for dozens of cards, adding a new credit card may be a smart move if you’re looking to maximize your rewards with multiple cards. Credit cards come with different benefits and bonuses, with some offering travel rewards while others offer zero fees or cash back on purchases.

You’re a Frequent Traveller

If you’re a frequent traveller, for instance, you may want to apply for a new travel rewards card. You’ll also want to consider whether the card has an introductory bonus balance that you may redeem for executive hotel stays or travel.

You Want Cash Back Perks

If you rarely use cash to make purchases, a cash back credit card might be a good addition to your wallet. Depending on your buying habits — whether you shop more at the grocery store or retail supermarket — you’ll want to apply for a card that will help you maximize the reward returns.

To Reduce High-Interest Debt

Credit card rewards could also mean saving on high-interest payments. In this case, getting a balance transfer credit card lets you move any high-interest credit card balances to a low or even 0% annual percentage rate (APR) card for a specific period. You may enjoy an introductory 0% on balance transfers for up to 18 months.

You Want to Increase Your Credit Limit

It also makes sense to get an extra credit card when you’re looking to increase your available credit limit. If you can maintain lower credit card balances with a high available credit limit, you’ll enjoy a favourable credit utilization rate. Remember, your credit utilization ratio is the second most important factor in calculating your FICO score, so you should keep it as low as possible.

Does the Number of Credit Cards You Have Affect Your Credit Score?

The number of credit cards you own can potentially lower or boost your credit score. Essentially, it all boils down to how you manage your cards. Here’s how the most important components in calculating your credit score are affected when you open a new credit card.

Payment History

Your payment history is the most important factor in calculating your credit score, so you should always strive to avoid late payments. Having multiple credit cards can make it difficult for you to manage different payment due dates, which could result in missed payments. The aftermath: a hit on your credit score.

It’s easier to remember one payment due date than several. Try contacting your credit card company to see whether they can reset your billing cycles so that they are the same for all cards.

Credit Utilization Rate

Your credit utilization rate is a huge contributing factor to your credit score, with experts recommending that you keep it below 30%. Having multiple credit cards may lower the balance-to-limit ratio, which will help boost your score. On the flip side, you could get yourself into expensive debt if you’re not a responsible user.

You need to understand that having lots of credit available doesn’t mean you must necessarily use them all.

Length of Your Credit History

The average length of your credit history decreases when you open a new credit card. And while this only hurts your credit score a few points, the points may add up if you open several cards within a short time. Even so, you can expect your credit score to bounce back within a few months.

Why You Shouldn’t Own Too Many Credit Cards

Adding too many credit cards in a short period will ding your credit score. Each credit card application attracts a hard inquiry on your credit file, and too many of them occurring in a short timeframe will negatively affect your credit score. Remember, a hard inquiry will sit in your credit report for up to two years.

Owning too many credit cards also means that you’ll have a difficult time tracking your spending and, if you’re not careful, may even lead to bad spending habits. And even if you’re not spending beyond your means, you may easily forget to clear one of your bills and your credit score will suffer.

The Bottom Line

There’s neither a golden rule nor a magic number to the number of credit cards you should own. Using multiple credit cards could help you rack up multiple savings, just as using it for the wrong reasons could get you into big trouble. Ultimately, you’ll want to review your spending habits and financial health to decide whether you need that extra credit card.


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Author Bio

Caitlin McCormack
Caitlin is a skilled freelance writer with an extensive background in finance writing for a number of finance blogs such as Her works can also been seen in American Profile, DeSoto Magazine, MotorHome Magazine, German-Life, and many others.

Article comments

Guido DI Renzo says:

I currently have 7 cards and was just pre approved for the BMO Eclipse Visa Infinite card a few days ago. I accepted.
After reading up on the cards features and insurance benefits, it really is a great card.
I promised myself no more cards, even though I could easily get more, why bother?
Some people need to be told you have enough by a bank, sometimes you just know by your internal instinct, and 8 is my magic number.
It’s also great to lower your credit utilization ratio with the additional credit available, but if you can’t help yourself to manage the additional credit, you’ll be in a whole heap of trouble very quick.
Thank you for the article!!

Daniel from GreedyRates says:

Hi Guido,
Absolutely- while there’s something to be said about keeping it simple, there’s also something to be said about knowing your limits and working within your boundaries of what’s manageable. Sounds like you’ve got a handle on your credit card situation. Hope you’re getting the benefits of what each has to offer.