This Is How Many Credit Cards You Should Have, According to Finance Experts

published Jan 16, 2024
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You’re reading through yet another story on credit card point hacking, wondering how you can book your first-class tickets to Japan. Or you’re listening to a TikToker explain how they’ve leveraged one credit card for groceries, one for restaurants, and they’re raking in the cash-back points and bonuses. Before you know it, you’ve got one tab open with a credit card application and another with a search for whether it’s good to have multiple credit cards. 

“Multiple credit cards can offer the flexibility of various spending options, rewards, and the opportunity to build a credit history,” says Shonnita Leslie, personal finance content creator and side hustler at Noir in Color.

But multiple credit cards also come with a crash course in money management while you’re keeping track of statement balances, minimum payments, and due dates. Wondering if it’s worth it? Here’s what the finance experts have to say.

Is it good to have multiple credit cards?

The first thing to understand with multiple credit cards — before you even consider rewards — is that it can help your credit utilization rate. This is the percentage of your debt compared to available credit and, ideally, it should stay below 30%. Budgeting expert Andrea Woroch explains that if you have multiple credit cards (meaning you have more available credit), yet you keep your balances low, this will help your credit score because of low credit utilization.

You can leverage multiple cards to earn rewards in different categories. “For instance, you can have a grocery rewards card or gas rebate to earn more back at the pump or food store while also having one that gets you more back for travel if you travel often,” says Woroch. 

Multiple credits also can help you stay organized, particularly if you use one card for categories like business expenses, child expenses, travel, home, and personal.

When is it bad to have multiple credit cards?

You know the saying, more money, more problems? The same could be said for more credit cards. Ben Markley, personal finance expert and content creator for YNAB, explains, “Ultimately, more cards means more payments to manage, which creates a greater potential for a missed payment. A missed payment takes a bigger toll on your credit score than a somewhat improved credit utilization ratio.”

Woroch also notes that carrying multiple credit cards can be tempting for those who may be tempted to spend. “The more available balance you have, the more potential debt you can get into. Unless you are savvy and pay off your balances in full, it’s best to stick with just one credit card.” 

Additionally, carrying multiple cards could mean missing out on the very reason you opened multiple cards — the rewards. “Having your purchases spread across multiple credit cards can prevent you from maximizing rewards. For example, if you’re trying to earn using an airline miles card but you use multiple cards, you might not earn the maximum value needed to book a flight,” says Woroch.

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Does having multiple credit cards hurt your credit score? 

It’s often not the multiple credit cards that hurt your credit score, but how you use them. If your credit utilization ratio is high because you’re close to maxing out each of these cards, your credit score will suffer. That can have an impact that far outweighs the benefits of points and rewards. “Over time, a lower credit score can make it more difficult to secure loans or credit in the future, and affect your ability to secure housing, thereby limiting your financial flexibility. It’s not just about your ability to repay the debt. Oftentimes it’s the amount of debt you have that matters,” says Leslie.

If you find that multiple credit cards are hurting your score due to missed payments, Courtney Alev, consumer financial advocate at Credit Karma, suggests creating alerts for due dates or setting up automatic payments. “Some credit card issuers let you change your statement dates to sync up your payments across accounts, which can help you keep track.”

How many credit cards should you have?

While it’s totally dependent on the card user, their ability to keep track of multiple cards, and whether they can use them responsibly, Alev suggests, “Having at least one credit card can help you build credit, and the general recommendation is to have two to three credit cards alongside other types of credit.”

However, more credit cards can work if you have the systems in place to manage them. Woroch says she personally has six credit cards. She uses them for various business ventures, personal expenses, and family expenses. “I have a credit score of nearly 800 because they are each paid off in full each month. But this helps me manage an otherwise complex financial situation.”

What should you do if you have too many credit cards?

“If you find yourself overwhelmed by credit cards, you can find clarity by looking at the cash you have right now. Decide what you want every dollar in your bank accounts to do (including making debt payments) and write down that plan,” say Markley. Then, evaluate your cards and decide which ones are helping you get towards your goals and which ones aren’t.

Markley recommends, “For the ones that aren’t serving you, make a plan to pay them off completely and then decide whether you’d prefer to just stop using them or cancel them.”