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There’s no magic number of credit cards you should have. But most experts recommend sticking with as many credit cards as you can effectively manage and keep track of.
For some people, that’s one or two cards. For others, it could be many more. Having at least one card can help you build credit, but having too many cards can lead to missed payments and debt.
Here’s how to know how many credit cards are enough and when to draw the line.
How many credit cards does the average person have?
Most American adults — 77% — have at least one card, and the average person has about 3.84 credit cards.
The number of cards someone has depends on their age, income level, and credit history. Many people have more or fewer cards depending on their financial situation and personal preferences.
So how many credit cards should you have? There’s no magic number. The answer depends on your spending habits and financial goals.
“Choosing the right number of credit cards isn’t about picking an arbitrary number and sticking to it.
It’s more about knowing what you can handle financially and how you’ll use the cards,” says Rachana Bhatt, head of credit cards for PNC Bank. “The number of credit cards you should have depends on what you want to achieve with your money, how disciplined you are with spending, and how good you are at managing your finances.”
Why experts say you need at least one credit card
Most experts agree having at least one credit card is a good idea. There can be many benefits to having a credit card:
- Helps build credit history: Responsible credit card use can help you qualify for favorable terms on loans and other financial products.
- Serves as an emergency fund: A credit card can be a backup source of funds if you don’t have immediate access to cash.
- Rewards and perks: Many cards offer rewards, like cash back or points, allowing you to earn benefits on your everyday purchases.
- Offers payment flexibility: Credit cards make it possible to pay for purchases over time.
Credit cards are also a more secure way to pay than other payment forms like cash or debit cards.
“Many credit cards offer consumer protections on certain purchases, such as extended warranties or purchase protection. In addition, credit cards offer better fraud protection policies than debit cards,” says debt attorney Leslie Tayne, founder of Tayne Law Group.
How credit cards affect your credit score:
Your credit card significantly impacts your credit score. A commonly used credit scoring model, FICO, uses the following criteria:
- Payment history (35%): Making payments on time can help build a positive credit history. In contrast, late or missed payments can negatively affect your score.
- Amount owed (30%): Your credit utilization is the amount of credit you use compared to your total credit limit. Try to keep your credit utilization below 30%. Paying off your credit card balances in full or keeping them low can improve your credit utilization ratio.
- Length of credit history (15%): The length of time you’ve held or used credit cards. The longer your credit history, the more positively it impacts your score.
- Credit mix (10%): Lenders like to see a mix of different types of credit, including credit cards, installment loans, and mortgages.
- New credit (10%): When you apply for a credit card, lenders will do a hard pull on your credit. Multiple applications in a short period can lower your credit score, so it’s essential to be selective about applying for credit cards.
Understanding what makes up your credit score can help you work to increase or maintain your credit score. Consistently making on-time payments and using your credit card responsibly can contribute positively to your credit score. A pattern of making late payments or exceeding your credit limit can ding your credit score.
“Responsible use, including paying balances in full, making timely payments, paying above the minimum, and staying within credit limits, can positively impact your credit score,” says Bhatt.
The benefits to having more than one credit card
There are benefits to having a mix of cards in your wallet.
For one, you can take advantage of different types of rewards. Some cards may offer specific rewards, such as points for using a specific airline, while others may offer cash back on everyday purchases like groceries or gas.
“A customer can apply for different credit cards for specific needs instead of limiting themselves to one type of reward or benefit,” says Christopher Fred, head of credit cards and unsecured lending for TD Bank. “It can also help them build a more sophisticated credit report.”
Maintaining multiple credit card accounts can also lower your overall credit utilization ratio. Typically, the more cards you have, the higher your overall credit limit, and easier it may be to stay under the 30% utilization benchmark.
Benefits of having multiple credit cards include:
- Greater variety of rewards
- Increased credit mix
- Increased credit age
- Access to more available credit
- Decreased credit utilization ratio
Does having multiple credit cards hurt your credit?
Having multiple credit cards doesn’t necessarily hurt your credit when used responsibly.
But the emphasis is on responsible. For some, having too many credit cards can become overwhelming and lead to missed payments or debt, impacting your credit negatively.
“Properly managing credit utilization across multiple cards can show financial responsibility, while poorly managed utilization can lead to being viewed by lenders as a higher risk,” says Bhatt.
But how many credit cards are actually too many?
There isn’t a one-size-fits-all answer when deciding how many credit cards are too many. For some, having multiple credit cards can help maximize rewards on their spending. For others, one card is sufficient.
“The right number of credit cards you should own truly depends on your lifestyle and individual needs,” says Fred. “Though the typical American has around three credit cards, there’s not one number that is a catchall for consumers.”
The key to reducing the risk of having too many credit cards is assessing your current financial situation and weighing that against your ability to manage your money responsibly.
Challenges of having too many credit cards include:
- Not being able to afford all the monthly payments
- Forgetting or missing payments entirely
- Incurring late fees for missed payments
- Paying an increased amount of interest
- Accumulating more debt than you can afford to repay
- Increased total amount of annual fees
How to decide if you should get another credit card
Consider your current spending habits and current credit card mix. Are there any gaps where you could earn rewards with an additional card?
If your goal is to earn different rewards that align with your spending habits, then having a diverse mix of credit cards makes sense. For instance, if you’re a traveler and a foodie, having a credit card that provides airline rewards and another that offers cash back on dining can be helpful. Having a credit card that doesn’t charge foreign transaction fees may also be helpful.
On the other hand, if you prefer to keep your finances simple, one or two key credit cards may be enough. If you only open one credit card, consider a card that doesn’t charge an annual fee to minimize your expenses. A cash back card is a solid way to earn money on your everyday spending.
It may also make sense to hold off on opening another card if you struggle to stay on top of payments or you’re not using the cards you already have. The key is to find your own balance.
How to manage multiple credit cards
If you have multiple credit cards, managing them wisely is critical to maintaining a good credit score.
“You need a system to keep track of your bills, including your credit cards,” says Tayne. “You may prefer pen and paper, a spreadsheet, or a mobile app. The medium doesn’t matter, but the habit does. You should sit down and pay your bills at the same time each month, making sure to check off every expense and creditor on your list.”
Some best practices for managing multiple credit card accounts include:
- Monitor card due dates and balances: This will help you make timely payments and avoid interest. Consider creating a spreadsheet containing the due dates and balances for all your credit cards.
- Maintain a low credit utilization ratio: Keeping your card balances low is better for your credit score and can help you avoid accumulating too much debt.
- Use budgeting apps or calendar reminders: These can help you track your various accounts and provide a holistic view of your financial situation.
- Open accounts strategically: Before adding a new credit card to the mix, ensure it aligns with your financial goals.
The bottom line
Finding the best credit card for you depends on your financial goals and needs, income, and lifestyle. There’s a broad range of credit card options on the market, from 0% interest cards to cards that specialize in providing cash back or travel rewards.
The key is to research, shop around, and review the fine print of each card carefully before selecting a card and signing on the dotted line.
Opinions expressed are author’s alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.