How Many Credit Cards Should I Have?
The answer depends on your circumstances. Learn more about how to figure out the right number of credit cards for you
Using credit cards responsibly can be a great way to build credit, manage your finances and take advantage of perks and rewards. But figuring out how many credit cards a person should have might feel confusing. Should you have more than one? And how many credit cards is too many?
There’s no one-size-fits-all answer. It’s all about figuring out what works for you. Here are some things to consider when you’re deciding how many credit cards you should have.
How Many Credit Cards Does the Average Person Have?
The average American has 3.84 credit card accounts. That’s according to the 2020 data from Experian®, one of the three major credit bureaus. But numbers might vary depending on the source. And while what others are doing might be helpful to know, it shouldn’t necessarily tell you how many credit cards you should have.
Remember that not everyone has a credit card. And using credit responsibly is important no matter how many credit cards you have.
What Are the Benefits of Having Multiple Credit Cards?
Having more than one credit card gives you more available credit to work with. That can also mean more spending flexibility. But having more than one card also means keeping up with more than one bill every month. Just something to keep in mind.
There are many types of credit cards out there. And enjoying the different rewards and perks some cards offer can be one advantage of having credit cards. So if you’re thinking about getting a second credit card, you might consider whether a rewards card might be right for you.
Before you apply for a rewards card—or any card—it’s important to remember to use it responsibly and always pay on time. That way, you can take full advantage of all the perks without getting in over your head.
How Can Having Multiple Credit Cards Affect Your Credit Score?
Having multiple credit cards—and how you use them—can affect your score in a number of ways. Just take a look at some factors the Consumer Financial Protection Bureau (CFPB) says can affect your credit:
First, 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 lender gets a copy of your credit report to help decide whether you’ll be approved.
Applying for a lot of cards in a short period of time means triggering many hard inquiries. A single hard inquiry from one credit card issuer generally has a small impact on your credit score. But multiple inquiries in a short period of time might have a more significant effect, according to the CFPB.
Credit mix, or how many different types of accounts you have, can also be an important factor in calculating your credit scores.
Credit cards are a type of revolving credit account. And having a mix of credit, like revolving credit and “closed-end” installment loans—such as an auto loan or a mortgage—can help your credit score.
Your credit score is determined in part by how long you’ve had credit. As long as your accounts are managed responsibly and in good standing, the older your average credit age, the better.
Closing an old card to make room for a new one is going to make your average credit history younger. And that could negatively affect your credit score.
Credit Use & Total Debt
Carrying a balance on multiple credit card accounts can impact things like your credit utilization ratio and your debt-to-income ratio. Your credit utilization ratio is basically how much available credit you’re using. 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 lending decisions and how interest rates are determined.
Using Credit Cards Responsibly
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 a good credit score.
You might want to set reminders on your phone or leave a note on your fridge to make sure you don’t forget. Many credit card companies also offer email and text alerts you can opt in to. Or you can set up automatic payments so you never have to worry about forgetting to pay on time.
Pay More Than the Minimum Amount
Whenever you can, it’s a good idea to pay your balance in full every month. This can help you pay down your balance faster, minimize interest charges and avoid maxing out your card.
If you can’t pay the full balance, it’s still a good idea to pay more than the minimum amount due if possible.
Keep Your Credit Utilization Ratio Low
Remember credit utilization? Well, the lower your credit utilization, the better your credit score might be. According to the CFPB, experts recommend keeping your credit utilization below 30% of your 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. One potential benefit of having multiple credit cards is increasing your available credit.
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 score. And it can help you spot errors on your credit report or fraud attempts as soon as possible.
One way to monitor your credit is by using CreditWise from Capital One. With CreditWise, you can access your TransUnion® credit report and weekly 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.
You can also get a free copy of your credit report from each of the three major credit bureaus—Experian, Equifax® and TransUnion. Visit AnnualCreditReport.com to learn how. There may be a limit on how often you can get your report. You can check the site for more details.
Can You Have Too Many Credit Cards?
How many credit cards you should have open depends on your needs and unique circumstances. But there are some general things to be aware of before you apply for new credit:
- Terms and conditions: It’s important to make sure you know about all the terms of a credit card before applying. That includes things like fees, interest rate, rewards redemption options and more. If you’re not comfortable with all the terms, it might not be the card for you.
- Keeping track of payments: Having more credit cards than you can easily manage might also make it more likely for you to miss payments or pay late. And that can hurt your credit scores.
- Overspending: According to the 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 you can to keep spending in check. And apply only for the credit you need.
Find Out if You’re Pre-Approved
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. Talking to a financial expert might help you figure out what’s right for you.
Thinking about applying for a credit card but not sure where to start? You might consider checking whether you’re pre-approved or pre-qualified. You can find out whether you might be approved for a credit card before you even apply.
Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.
We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.
Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.
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