How Many Credit Cards Should You Ideally Have?

Updated: July 31, 2018
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Exactly how many credits cards is too many? The short answer to that is that there’s no magic number and it varies from person to person depending on their spending habits, card limits and their ability to pay on time each month.

The number of cards you have, and by extension your combined credit limit, can impact your credit score which then impacts your ability to buy a car, secure loans or rentals, among other things. According to Gallup research the typical consumer has more than one credit card, and most U.S. adults average about 3.7 cards in total.

Credit card trends

Before the Great Recession, many people had as many as a dozen credit cards! But as the economy took a hit and it became harder to get credit, people didn’t open as many accounts.

Today, with the economy on solid ground, people are using several cards at once and some are even maxing them out. A survey in 2016 found that 58% of consumers had maxed out a card at least once, and 61% of that group had even maxed out multiple cards.

The pros of multiple credit cards

There are times when opening several accounts may benefit you, such as:

  • Reaping multiple rewards programs (travel perks, cash back, etc.)
  • Can help you separate expenses
  • Can help you buy a home and get approval from a mortgage lender, which typically requires at least three credit lines

The cons of multiple credit cards

It’s important to weigh the pros and cons and have a full understanding of how multiple credit card accounts can hurt you as well. For instance, too many cards can:

  • Hurt your credit
  • Promote bad spending habits and overspending
  • Increase your risk of having your personal information stolen in a data breach

What it does to your credit

What’s most important to understand is that the number of cards you have does not directly influence your credit score: Your spending and payments do. For example, if having more cards means you use less of your available credit, this can help your score. But if you have too many cards and are not making payments on time, this will hurt your score.

So what’s most important is not the actual number of cards you have, but if you pay on time and use a small portion of your available credit, rather than maxing them out.

If you’re trying to build your credit make sure you:

  • Pay on time
  • Only use 30% or less of your available credit limit
  • Keep your credit card accounts open
  • Space credit applications six months apart so you don’t have too many credit checks at one time

Questions to ask yourself

Some consumers enjoy the flexibility and convenience of having more than one credit card, while for others it leads to overspending.

Before you open another credit card, make sure to ask yourself these important questions:

1. Do I have experience with credit cards?

2. Can I afford to carry multiple balances at once?

3. Will I use the card enough to benefit from it?

4. Why am I opening this account?

This will help you determine if opening a new card or account will help or hurt you!

Feature Illustration: Laura Caseley For The Money Manual