How many credit cards should I have?

The number of credit card accounts you open depends on multiple personal factors, including your credit history, credit scores and financial goals. If you are trying to build credit, manage your finances and take advantage of perks and rewards, you may be considering multiple accounts. 

Figuring out how many credit cards you should have can be overwhelming. Should you have more than one credit card? How many is too many? Does applying for a credit card hurt your credit scores? 

There’s no one-size-fits-all answer. What’s best for a working mom may not be the same as what’s best for a college student. Here are some factors you can consider when thinking about applying for a new credit card.

Key takeaways 

• The average American has three credit card accounts. But that may not be what works for you.
• Some advantages of having multiple credit cards are increased buying power and the ability to maximize different card offerings and benefits.
• Some downsides to having multiple credit card accounts include tracking different bills and payment due dates and the potential to overspend.
• Not everyone needs a credit card. But having a credit card can help you build credit if it’s used responsibly.

The average American has three credit card accounts. That’s according to 2021 data from Experian®, one of the three major credit bureaus, which also include Equifax® and TransUnion®. 

The average number of credit cards varies from generation to generation, though. A report from TransUnion shows that compared with other generations, millennials are opening the most new credit cards. Gen Z is opening new accounts at an increasing rate, too.

Knowing what others are doing might be helpful. But ultimately, the number of cards you have should be based on your personal financial situation. 

Having more than one credit card can give you more available credit to work with. It can also mean more spending flexibility. But having more than one card also means keeping track of more than one bill every month. 

You might decide you have too many credit accounts if:

• You’re not comfortable with your fees or interest charges.
• You’re having difficulty managing multiple credit card bills and due dates.
• You have a pattern of missed or late payments.
• You’re unable to maximize and keep tabs on your various card benefits and perks.

Can you have too many credit cards?

Short answer? Yes. But how many credit cards you should have depends on your needs and circumstances. Here are some questions to ask yourself before you apply for new credit:

• What are the terms and conditions? It can be helpful to make sure you know about all the terms of a credit card before applying. That includes things such as late fees, interest rates, reward redemption options and more. If you’re not comfortable with all the terms, it might not be the card for you. 
• What rewards and benefits do you want? Consider whether the card offers rewards or benefits you don’t already have. 
• How many cards can you comfortably use and pay off at the same time? Consider your personal spending and budgeting habits.

You may be wondering: Is it good to have multiple credit cards? Here are a few points to consider: 

Potential advantages of multiple credit cards

There are several benefits to having multiple credit cards, if they’re used responsibly:

• Increased buying power: Having more credit available can increase your spending power. This can be especially helpful in a financial emergency.
• More available credit: Adding another credit card account can increase your available credit. If you keep your credit utilization low, it could have a positive effect on your credit scores.
• Maximized benefits across multiple cards: There are many types of credit cards, such as travel rewards cards and cash back cards. Some cards may offer temporary 0% APR intro rates.

Potential disadvantages of multiple credit cards

Some potential disadvantages of having multiple credit cards include:

• More accounts to manage: Having more payment due dates to track might make it more likely for you to miss payments or pay late. And that can hurt your credit scores. 
• Overspending: According to the Consumer Financial Protection Bureau (CFPB), some people tend to be optimistic about their financial future and charge more than they can currently afford to pay off. The CFPB recommends paying off your balance in full whenever possible to keep spending in check. And apply only for the credit you need. 
• Impact on your credit scores: When you apply for a new account, your credit scores may take a temporary hit. And applying for a bunch of credit cards in a short period could send the wrong message to lenders.
• Additional fees: Some credit cards charge annual fees. Having multiple cards with these fees can add up.

Having multiple credit cards—and how you use them—can affect your credit scores in a number of ways. Here are some factors that can positively or negatively affect your credit when applying for a new card.

Hard inquiries

It’s important to know that when you apply for a new credit card, it triggers a hard inquiry with the credit bureaus. A hard inquiry is when a credit card issuer gets a copy of your credit report to help it decide whether you’ll be approved. 

Applying for a lot of cards in a short period of time triggers many hard inquiries. A single hard inquiry from one credit card issuer generally has a small impact on your credit scores. But multiple inquiries in a short period of time might have a more significant effect, according to the CFPB.

Types of credit

The different types of loan and credit accounts you have is sometimes known as your credit mix.

Credit cards are a type of revolving credit account. Having and responsibly using a mix of credit, such as revolving credit and installment loans—such as an auto loan or a mortgage—can help your credit scores. 

Credit age

Your credit scores are determined in part by how long you’ve had credit. As long as your accounts are managed responsibly and are in good standing, the older your average credit age, the better. 

Closing an old card to make room for a new one could make your average credit history younger. And that could negatively affect your credit scores. That’s something to consider before closing accounts.

Credit use and total debt

Carrying a balance on multiple credit card accounts can impact things such as your credit utilization ratio and your debt-to-income ratio. Your credit utilization ratio is how much total available credit you’re using across all your accounts. And your debt-to-income ratio is how much total debt you have compared to your income. 

Both measurements might matter when it comes to lenders’ decisions and how interest rates are determined.

No matter how many credit cards you have, responsible use is an important part of financial health. And remember, having multiple cards means keeping up with multiple bills. Here are a few things to know about using credit cards responsibly:

Pay on time

No matter how many credit cards you have, paying your bills on time—every time—is vital if you’re working toward having a good credit score. Payment history can be a big part of calculating your credit scores. And even occasional late or missed payments can hurt your scores if they’re reported. 

You might want to set reminders on your phone or leave a note on your fridge to make sure you don’t forget about a due date. Many credit card companies also offer email and text alerts you can opt in to. Or you can set up automatic payments to help you make payments on time. 

Pay more than the minimum amount 

You should try to pay your balance in full every month. This will help you avoid incurring interest charges and maxing out your card. If you can’t pay the full balance, paying more than the minimum amount due can help. 

Keep your credit utilization ratio low 

Remember credit utilization ratios? The lower your credit utilization, the better your credit scores might be. According to the CFPB, experts recommend keeping your credit utilization below 30% of your total available credit. So if your only line of credit is a credit card with a $2,000 limit, that would mean keeping your balance below $600. 

If you’re able to keep your balances low across all accounts, having multiple credit cards might help keep your credit utilization ratio low.

Stick to a budget

Sticking to a budget is a great way to keep your finances in check, especially if you’re managing multiple credit cards. 

The good news is your credit card comes with a very useful budgeting tool—the monthly statement. Your monthly statement gives you an overview of what you’ve spent. That can be a great place to start when you’re learning how to budget with a credit card. It’s also a good idea to spend responsibly and not charge more than you can afford to pay off each month. 

Monitor your credit 

Keeping a close eye on your credit helps you know where you stand as you work to improve your credit scores. And it can help you spot errors on your credit report or fraud attempts as soon as possible. You can get a free copy of your credit report once a year from each of the three major credit bureaus. Visit AnnualCreditReport.com to learn how.

Another way to monitor your credit is by using CreditWise from Capital One. With CreditWise, you can access your TransUnion credit report and VantageScore® 3.0 credit score—without hurting your score. And CreditWise is free for everyone. You don’t even have to be a Capital One customer to enroll.

Use digital tools

Many aspects of the credit card management process can be digitized. For example, Capital One customers can take advantage of the Capital One Mobile app. It features a variety of digital tools—like the ability to track upcoming bills and block recurring charges—to make managing finances more convenient.

There’s a lot to think about when deciding how many credit cards you should have. At the end of the day, it’s an individual decision. It helps to do your research and consider what’s best for your financial situation before opening a new credit card account.

Thinking about applying for a credit card but not sure where to start? Compare Capital One credit cards. 

And when you are ready to apply, pre-approval from Capital One can help you understand what credit cards you might be eligible for. It’s quick to use and only requires minimal information. Plus, using the tool won’t hurt your credit scores because it requires only a soft inquiry.