How Many Credit Cards Should I Have?
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When it comes to how many credit cards you should have, know that there’s no specific number to fit every person.
To determine the right number for you, it’s important to look at your financial and lifestyle needs. For example, you may want to consider a 0% introductory APR card if you want to finance a large purchase, a cash back rewards card if you want to earn rewards on everyday purchases, or a balance transfer card if you have high-interest debt that you want to transfer.
But while there are advantages to owning a variety of cards, beware that there are also several disadvantages. We’ll walk you through what you need to know about owning multiple credit cards, including the pros and cons and the best credit cards to have, to help you determine the right number for you.
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How many credit cards does the average American have?
According to Experian, the average American has 3.84 credit card accounts as of Q3 2020. There are a number of reasons why someone will have multiple credit cards. Having a backup card can be helpful in case your primary credit card becomes lost or stolen. Another credit card can also be helpful if you face unexpected or emergency expenses, like medical bills or car repairs, or if you need to make a large purchase but prefer to pay over time instead of all at once.
Splitting large costs across multiple credit cards also allows your balance to stay low on each card — which can have a positive impact on your credit score.
How many credit cards is too many?
While managing two or more credit cards may be easy for some, it can be a challenging task for others. With multiple credit cards comes multiple payment due dates, requiring you to keep a close eye on credit card activity across a number of platforms. In addition to monitoring your accounts, it is important to monitor spending – since having more credit can make extra spending extremely tempting.
Pros and cons of having multiple credit cards
| Pros | Cons |
|---|---|
Opportunity to earn a variety of rewards Can help build credit More available credit Increased credit utilization ratio | Higher possibility of missed payments Potential for more debt and a lower credit score Possibility for multiple annual fees A hard inquiry appears on your credit card each time you apply |
Does applying for a credit card hurt credit?
Applying for a credit card can negatively impact your credit the following ways:
Hard inquiries on your credit
Each time you apply for a credit card, a hard inquiry appears on your credit report. This lowers your credit score by a few points every time it occurs and stays on your credit report for two years (although the negative impact lessens over time).
Age of your accounts
Opening a new credit card can hurt your credit score by decreasing the average age of your accounts. The length of your credit history accounts for 15% of your credit score, so having a longer credit history can reflect positively on your credit score. When opening a new credit card, leaving old accounts open and active can also help with the age of your accounts.
Applying for too many cards
While you can apply for a credit card as often as you like, an issuer may deny your application if you apply for too many credit cards within a certain time period. For example, Chase has an unwritten 5/24 rule that prevents you from being approved for a new Chase credit card if you’ve opened five or more personal credit cards from any issuer in the past 24 months.
How many credit cards should I have to build credit?
When it comes to building credit, the most important factor is how you manage your credit cards rather than the number of credit cards you have. Here are some ways you can use a credit card responsibly to help build your credit profile:
Pay on time
Making payments on time can help boost your credit score, although this can be more challenging to manage across several credit card platforms. A good tip is to contact your credit card company to make payment due dates the same for each of your credit cards when possible, and set up alert reminders and autopay to avoid missed payments.
Keep your credit utilization low
Having multiple credit cards can help increase your credit utilization ratio, which is the total amount of debt you currently owe divided by the amount of credit you have available. This ratio makes up 30% of your credit score. Opening another credit card can help you to decrease this number, since it will increase the amount of credit you have available. Experts recommend that you keep your credit utilization ratio below 30%.
Choosing the right mix of accounts
Your credit mix is the combination of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans you have. This makes up 10% of your overall credit score. Having a diverse range of credit accounts can help improve your credit score by demonstrating your ability to manage a diverse range of financial accounts.
What are the best credit cards to have
Selecting a variety of credit cards can help you maximize rewards and take advantage of significant savings over time. Whether you want to save on your weekly grocery bill or use your credit card to cover your next big travel expense, having multiple credit cards can help you cut costs on a number of items.
Cash back credit cards
Cash back credit cards are valued by consumers for their simplicity and flexibility, as well as their ability to earn rewards on everyday purchases. For example, for Chase Freedom Unlimited® cardholders enjoy 5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases
Cashback rewards can typically be redeemed for statement credits, direct deposits or checks.
Apply Now Dining rewards credit cards
If you eat out on a regular basis, a dining rewards credit card, like the Capital One SavorOne Cash Rewards Credit Card – which offers rewards on restaurant purchases and charges a $0 annual fee – may be ideal.
Gas rewards credit cards
A gas rewards credit card may be a good option if you’re looking to offset what you spend at the pump, since these credit cards can offer rewards or discounts on gas purchases. The Blue Cash Preferred® Card from American Express, for example, offers a generous cash back rate at U.S. gas stations.
Credit cards for emergencies
Emergency expenses, like car repairs or unexpected medical bills, can happen at any time. Having an emergency credit card on hand to help cover these expenses, like the Chase Freedom Flex℠, is a good option due to its long intro APR and cash back rewards program.
0% intro APR credit cards
If you have a big purchase coming up that you want to pay off overtime, a credit card that offers a 0% introductory APR for an extended period of time can be helpful, since you won’t be charged interest during the intro period. The Wells Fargo Reflect® Card card, for example, has a 0% intro APR for 21 months from account opening on purchases. After that, a 17.74%, 24.24%, or 29.49% Variable APR applies.
Balance transfer credit cards
If you have a large amount of high-interest credit card debt, a balance transfer credit card with a 0% introductory APR for a year or longer can help you save on interest charges while paying down your balance faster. The Citi® Diamond Preferred® Card, for example, offers an introductory APR of 0% intro APR for 21 months on Balance Transfers. Once the introductory period ends, an ongoing APR of 17.74% - 28.49% (Variable) will apply.
Travel credit cards
If you’re a frequent traveler, a travel credit card can provide rewards on travel purchases as well as valuable travel benefits and protections. The Chase Sapphire Preferred® Card, for example, offers an annual hotel credit, a boost in rewards value when you redeem points for travel through Chase Ultimate Rewards, and the ability to transfer points to qualifying transfer partners at a rate of 1:1.
Many credit card issuers will approve you for a second credit card as long as you meet the eligibility requirements. If you’ve done a good job of managing your other credit card, you are also more likely to be approved for a second card. If you are approved for a second credit card, you will want to see if the terms of your new card are different from your first card. This is because credit card issuers approve terms based on your income and credit standing, and this may have changed since you applied for the first card.
You can get a second credit card with bad credit; however, the odds of getting approved are lower. You may also receive higher interest rates and less desirable terms if you do qualify for a second credit card. It can be best to take steps to improve credit prior to applying for a second credit card.
You can apply for multiple credit cards at the same time; however, waiting between applications will give you a better chance at an approval. Issuers are more likely to deny your application if you have applied for several credit cards at the same time.
There are multiple ways that you can check your credit score:
1. Utilize free credit score tools online from a bank, credit card issuer, credit union or other lender.
2. Take advantage of financial institutions offering a free credit score to members.
3. Purchase your credit scores if it makes sense for you. Paid credit score services sometimes include additional features, like identity theft insurance and credit monitoring, that aren’t included with a free service.
It is recommended that you do not close out old credit card accounts, as keeping old accounts open and active will boost your credit score by helping your credit utilization and credit history. You may decide to close an old credit card if it carries a high annual fee; however, you can ask your credit card company if you can convert your card to a no-fee card in order to prevent your credit score from decreasing.
First, be sure that you are paying each of your credit cards on time and in full by keeping a reminder on when payments are due or setting up autopay. Next, check the terms and conditions of your credit card, and reconsider any with high annual fees. You should also keep track of the credit limit you have available on each credit card. Finally, select credit cards that align best with your current financial needs and decide what you plan to use each card for.
To see rates & fees for American Express cards mentioned on this page, visit the links provided below:
For Capital One products listed on this page, some of the benefits may be provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
The information related to the Capital One SavorOne Cash Rewards Credit Card, Chase Freedom Flex℠ and Wells Fargo Reflect® Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.
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