How Many Credit Cards Should I Have?

How Many Credit Cards Is Too Many?

The average American has four credit cards.1 With so many card options and offers with tempting sign-up bonuses, it’s easy to get carried away by applying for multiple credit cards. It’s a smart idea to have at least one for convenience and building credit, but is it good to have more than one credit card? How many credit cards should you have? The answer depends on your own responsibilities and goals. If you’re asking if you should open another credit card, you may want to weigh some of the pros and cons of having multiple credit cards.

Advantages to Having Multiple Credit Cards

Increase Your Credit Score

Your credit utilization, or what percentage of your available credit you’re using, makes up 30% of your credit score.1 Having multiple credit cards can actually boost your credit score by bringing down your credit utilization. If you only have one credit card and you’re spending close to your limit each month, you may have a lower credit score than if you were splitting costs between two credit cards and only using part of your credit limit.

Maximize Rewards from Different Credit Cards

Most credit cards offer some form of rewards. Some cards are geared toward travelers, so they offer rewards in the form of airline miles. Other cards reward points per dollar spent, to use towards future purchases. On a fixed rewards card, all purchases earn points equally, but on a tiered credit card, certain kinds of purchases are worth more. For example, swiping a credit card on a dining purchase may earn you more points than shopping at the drugstore.2 The most common and flexible type of credit card reward is cash back, which refunds a portion of money spent. Knowing how you spend your money can help you choose a card that supports your goals.

Have a Backup in Case of Emergencies

The most practical reason to have more than one credit card is to have a backup in case one is lost or stolen or if you find yourself in a financial emergency. You can often get a replacement card within a few days, but a second credit card ensures you have something else to hold you over in the meantime.1

Risks to Having Multiple Credit Cards

It’s Easier to Lose Track of Your Balances and Payments

Having several credit cards also means having several different payment due dates and statements to track. If you’re not organized, you might miss a payment and accidentally rack up interest and late fees. Set all your credit card due dates, if you can, to the same day to make it easier to stay on top of your balance.2

The Annual Fees Can Add Up

Many credit cards charge an annual fee. If you have several different credit cards, you’ll want to be sure you’re really using each card and making the most of the benefits in order to make the fees worth it.  There are also cards that charge no annual fees that might better suit your needs.

Opening Too Many Credit Cards in a Matter of Months Can Look Suspicious

When it comes to multiple credit cards, it’s important to allow time to pass before applying for the next card. Applying for too many lines of credit at once can make you look like a risk to creditors.5 Your credit score temporarily drops a few points when you apply for a new credit card, and if you open several at once, this can make a big difference in your credit score.4 Not only can your credit score suffer, but you may find it more difficult to manage several new credit cards at once.

Is It Bad to Have Too Many Credit Cards?

There’s no real limit to how many credit cards you can have. If you’re keeping up with the payments and using all of them regularly, there’s no reason you can’t open another credit card.

However, if you’re in any debt, now may not be the time to open a credit card. Having a bad credit score will make it harder to get approved. Plus, a new credit card can easily hurt your finances even more.3 If you need cash right now, LendNation’s online cash advance options can help you improve your money situation and get your debt under control.  If a cash advance isn’t for you, we have other flexible money solutions to help. All it takes is filling out a quick application online or stopping by any one of our convenient locations to get started.