How Many Credit Cards Should You Have?

/ BY / Credit 101

Is there a rule about the number of credit cards that you should have to keep your credit score as high as possible? Should you think twice about signing up for new cards?

Say you have two credit cards that you use regularly and responsibly, making payments on time and staying within your credit limit. You're not actively looking for another card, but in the past week, you've gotten offers for airline miles credit cards that have great rewards programs. You'd like to get the miles.

Or perhaps you've been trying to cut spending, and you get offers for one or two low interest credit cards. You wonder if it's a good idea to save some money by applying for that card and using it regularly instead of one of your current, higher-interest cards.

You're about to fill out the application when you stop and ask yourself, "Do I already have too many cards? Is opening that new card going to hurt my credit rating? Do credit rating agencies care about how many cards I have?"

No magic number

Unfortunately, there's no "right" number of credit cards that works for everyone. The number of cards that are appropriate for you will depend on many factors, including how many credit card accounts you already have open (and use), the credit limits on each of those cards, how much you owe on each card, and how much other debt you have.

Some financial experts suggest limiting yourself to just a few cards: a card that you use most of the time, an emergency backup that you use sparingly and maybe a business card if you want to keep business expenses and personal spending separate. More cards than that aren't really necessary.

You definitely should not get additional credit cards if:

  • You already have trouble controlling your spending. Instead of applying for a new card, put the one you have in the freezer and don't thaw it out unless it's a real emergency. (A big sale at your favorite shoe store is not an emergency.)
  • You can't pay off the credit cards bills that you already have. (If you're paying high interest, however, and are serious about eliminating your credit card debt, balance transfer cards might be an option, but only if you use them wisely.)
  • You're a new credit card user. Stick to one card until you're sure you can handle credit responsibly.

If you use credit cards sensibly, pay your current credit card bills on time, and could do the same thing with a new card, opening one more credit card probably won't hurt your credit score. But don't apply for both the airline miles credit card and the low interest credit card at the same time. Opening several new credit accounts within a short time is a red flag for the credit rating companies.

No matter how many credit cards you have, try to keep your balances on each card below about 30 - 35 percent of your credit limit. (This is known as the credit utilization ratio.) Be especially careful about opening store credit cards, since they have much lower credit limits than bank-issued credit cards and it's easier to go above that 35 percent utilization ratio. You may also want to check out the Federal Trade Commission's article on Choosing Credit Cards before you apply for any new credit card.

What if you decide you have too many credit cards? Don't close out the accounts. Although it seems contrary to common sense, closing a credit card account can actually hurt your credit score. Just put the cards away in a safe place and stop using them.

So how many credit cards should you have? Only as many as you can handle responsibly. Before you add to your credit card collection, ask yourself, "Do I really need this?"

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.