How Many Credit Cards Should I Have?

There can be advantages to having more than one credit card. However, there are just as many disadvantages. Understanding the pros and cons of having more than one credit card is important to help you decide what’s right for your personal financial situation.

How More than One Credit Card can Affect You

It might seem simple. Having multiple credit cards means you can charge more and maybe even earn more rewards. While that’s true, consider these factors.

You Could Miss a Due Date

Juggling multiple cards means dealing with multiple due dates. Miss your payment date by one day and it will cost you in interest and fees. If you miss it by more than 30 days, it hurts your credit score. Having just one credit card helps reduce this risk.

You Might Spend more than Necessary

Credit cards shouldn’t be an extension of your income. They should be a tool in your personal finance toolbelt. With too many credit cards available, you might charge more than you can afford. Carrying a balance only increases the cost and can even hurt your credit score.

You can Hurt your Credit Score

Carrying more than one credit card can hurt your credit score in multiple ways:

  • If you miss a payment for over 30 days, it can drastically hurt your credit score. Your payment history is the largest part of your credit score.
  • If you have over 30% of your credit line outstanding, you could hurt your credit score. Your credit utilization rate is the second largest part of your credit score.
  • Each time you open a new credit card it decreases your credit age, which lowers your credit score.
  • Each time you even apply for a new credit card it counts as an inquiry on your credit report which hurts your credit score.

When Multiple Credit Cards Makes Sense

You might wonder, should you even have more than one credit card?

You can, if you use them responsibly.

It makes the most sense for people that know how to use credit cards the right way. In other words, they know to only charge what they can afford to pay off in full each month. If you have good credit and qualify for reward credit cards, you can essentially get paid for using your credit card.

But you must be able to:

  • Charge only what you can pay off in full
  • Not use your credit card as an extension of your income
  • Pay all cards on time
  • Keep your cards open even if you don’t use them

Final Thoughts

There isn’t a right or wrong number of credit cards to carry. It depends on your financial habits. If you’re a spender and see multiple credit cards as a way to buy more, then have one credit card and save it for emergencies only.

If you can handle multiple credit cards and will benefit from the rewards and not carry balances, there’s nothing wrong with carrying multiple cards and earning the benefits.

If you need help getting your credit card debt under control, contact our credit counselors today for a free consultation.