Credit cards can provide convenience. Some come with perks and rewards that let you get more out of your purchases. And it’s true that using credit cards responsibly can be a useful way to build your credit. But what’s the right number of credit cards to hold? And how many credit cards is too many? The truth is, there’s no right answer—what really matters is how you use them.
Only apply for what you need
First, it’s important to know that every time you apply for a new card, it triggers a hard inquiry, which is when a bank or lender looks at your credit to decide if you’ll be approved. So, having a lot of cards means having a lot of hard inquiries. And, while a single inquiry generally has a small impact on your credit score, multiple inquiries might have a more significant effect—especially if you apply for too many cards in a short period of time.
Pay on time, spend responsibly
No matter how many cards you have, the only way to keep your credit in healthy shape is to pay your bills on time. Set a reminder on your phone or leave a note on your fridge to make sure you don’t forget, and try to pay your balance in full every month. It’s also a good idea to know your credit limit and do your best to stay well below that number for each card—30% of the limit or less if you can.
Age matters, so hang on to your cards
About 15% of your credit score is determined by how long you’ve had credit. The older that credit history, the better. Ditching an old card to make room for a new one—or adding a bunch of new cards—is going to make your credit history younger, potentially bringing down your credit score.
Set a budget
A budget is a great way to manage your finances, especially if you’re managing multiple cards. Learn how to budget with a credit card—many offer budgeting tools that can help. Your monthly statement gives you an overview of your expenses, which is a great place to start.
If you’re still wondering how many credit cards is too many, remember that there’s no magic number. It’s all about using your cards in the right way in order to build your credit and maintain a healthy score.