How Many Credit Cards Should I Have? (and How Many Is Too Many?)

CREDIT CARDS - CREDIT CARD BASICS
Is there a certain number of credit cards everyone should have? Not exactly. But you can find out what your sweet spot might be.
Updated April 9, 2024
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How Many Credit Cards Should I Have? (and How Many Is Too Many?)

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How many credit cards should you have? Maybe one or two? What about three or more?

According to a review of national credit report data by the credit bureau Experian, the average American has nearly four (3.84) credit cards. But is that the ideal number?

When it comes down to it, there’s no set number of credit cards that works for everyone because it depends on your personal financial situation. However, you should keep a few things in mind if you want to know how many cards could be right for you and how many might be too many.

In this article

How many credit cards should you have?

Unfortunately, there’s no ideal number of credit cards that’s going to be right for everyone. But there could be an ideal number for you because of your situation and financial goals. And that’s how it is for each person — depending on your situation, including lifestyle and spending habits, you might want more (or fewer) credit cards than someone else.

For example, starting out with one credit card might make sense if you’re just starting to build your credit. In this case, it’s smart to start out slowly because you want to get used to how credit cards work and make sure you’re able to pay off the balance each month. Having more than one credit card to improve your credit score is unnecessary, so having just one card could be a good move for beginners.

But as you learn more about credit cards and what they have to offer, including rewards and benefits, it might start to make sense to have more cards. This is especially true if you want to earn cash back on your purchases or points and miles for the purpose of traveling. If you’re considering a new card, it’s a good idea to compare credit cards and see what different ones offer.

How multiple credit cards can impact your credit score

Having multiple credit cards won’t necessarily build your credit score faster, but it could affect your credit in other ways.

Your credit score is typically affected by multiple factors, though it could depend on which scoring model is being used. The most popular scoring model is the FICO Score model, and these are common factors that affect it

  • Payment history: Making your credit card payments on time is an important part of building your credit, as it accounts for 35% of your FICO Score. If you have multiple credit cards, you might find it difficult to track each card and keep making on-time payments. However, setting payment alerts in your online account or using a budgeting app could help you stay on top of your payments.
  • Credit utilization: How much credit you’re using out of the total credit line you have available is your credit utilization rate. This factor accounts for 30% of your FICO Score. You typically don’t want to use more than 30% of your available credit limit or your credit score could go down. Having multiple credit cards could increase your total available credit and make it easier to stay under the 30% credit utilization ratio.
  • Credit mix: Credit cards aren’t the only credit products out there, and lenders like to see a mix of different products on your credit report. This could include credit cards, personal loans, mortgages, car loans, and more. Having multiple credit cards wouldn’t help much for this factor because they’re the same type of credit product. This factor accounts for 15% of your FICO Score.
  • New credit: You typically get a hard inquiry into your credit report whenever you open a new credit product. Hard inquiries can decrease your credit score a small amount. Too many new credit accounts opened over a short period of time could appear risky to lenders. If you open multiple new accounts around the same time, it could have a negative impact on your credit score. This factor accounts for 10% of your FICO Score.
  • Length of credit history: Your credit history is calculated by determining the average age of all your credit accounts. A longer positive credit history is typically better for lenders because it shows you’re less risky. Your average credit history length should benefit from having multiple credit cards open for long periods of time. This factor accounts for 15% of your FICO Score.

Knowing how credit card factors affect your credit score, it likely makes sense to qualify for and use credit cards when you’re younger. This could help ensure you can build your credit from a young age and open more financial opportunities as you get older.

For example, it’s not unheard of for young adults to have credit cards before and during their college years and to end up with good or excellent credit scores by the time they graduate. This is important because having a healthy credit score could qualify you for better financial products over the course of your life.

These products could include loans with better interest rates and credit cards with more benefits. This may not mean as much to you when you’re younger, but it could save you money when buying a new car or taking out a mortgage on a house and other possible scenarios.

Different credit cards for different purposes

Another reason you might want multiple credit cards is because credit card companies have created different types of cards meant for different purposes. One card might make sense for one particular situation, whereas another might make sense for something else. But having both could be helpful.

Here are a few types of credit cards to consider:

  • Travel rewards: The frequent or occasional traveler is well served by credit cards that offer rewards points and travel benefits. You could turn your purchases into nearly free flights or hotel stays and enjoy helpful perks such as airport lounge access, free checked bags, and elite status with a rewards program. For more details, check out our list of the best travel credit cards.
  • Cash back: How does getting a discount on every purchase you make sound? With a cashback card, that’s basically what’s happening. You make purchases and earn cash back, and then you use the cash how you please. For more details, check out our list of the best cashback credit cards.
  • Balance transfers: In some situations, it might make sense to transfer your debt to a balance transfer credit card that has an introductory 0% APR offer. This could help you pay down your credit card debt while avoiding interest on the balance for a certain period of time. For more details, check out our list of the best balance transfer cards.
  • Credit building: If you’re building or rebuilding your credit, you might not qualify for credit cards with much in the way of rewards and benefits. But you can likely qualify for a secured credit card. These cards are typically meant for individuals with little or no credit, so they’re often easier to qualify for. For more details, check out our list of the best secured credit cards.
  • Business: If you run a small business, a business credit card can help you separate business transactions from personal transactions. In addition, many of these cards offer helpful benefits and rewards for business owners. For more details, check out our list of the best business credit cards.

These types of credit cards can also be broken down into further categories. For example, it might make sense to have multiple rewards cards that earn bonus points in different spending categories. You might want one card for spending at restaurants and groceries, whereas another would work best for gas and streaming services. In these and other scenarios, having multiple credit cards could help you maximize your total rewards earnings.

How to use credit cards to improve your credit

If you’re not happy with your credit score, there are several ways you can improve your score relatively quickly. If you use the right card responsibly and strategically, you might be surprised by how much your score can change.

1. Choose the right card

If you have bad credit, your choices may be limited. A secured credit card can be a good option for people who tend to overspend, since these cards require a refundable deposit, typically in the amount of your desired credit limit.

These cards also tend to be easier to acquire than traditional credit cards, but they aren’t the only ones you could qualify for. Here are a few credit cards made specifically for people with less-than-perfect credit.

  • Capital One Platinum Secured Credit Card: This card requires a deposit of $49, $99, or $200 to get an initial $200 credit limit, depending on your creditworthiness. You can make a larger deposit to get a higher credit limit up to $1,000. Plus, there’s no annual fee.
  • Discover it® Secured Credit Card: Your credit line will equal your deposit amount, starting at $200. There’s no annual fee, and this card has fairly robust rewards. Plus, Discover will match your earnings at the end of your first year.
  • Capital One Platinum Credit Card: This card comes with no annual fee, and you can get a credit limit increase after five months of on-time payments. You can also utilize CreditWise, which gives you free credit score access and other credit monitoring tools.

2. Pay on time and in full

Every credit card payment you make will be reported to the three major credit bureaus, and on-time payments will positively impact your credit score. You’ll want to make at least the minimum monthly payment to avoid hurting your credit. But paying your bill in full will reduce your utilization rate, which also helps build credit.

Take advantage of autopay options for your card since an automatic payment will ensure you don’t forget, but always make sure you have enough money in your bank account to cover the payment.

3. Consider becoming an authorized user on someone else’s account

If you know someone with good credit who pays their bills on time, you could benefit from their healthy credit history by becoming an authorized user on their account. Most credit card issuers will report payment activity to authorized users' credit reports, so your score could see a boost as the primary account holder pays their bills.

Just make sure you don’t overspend since the primary account holder will be legally responsible for making sure the account gets paid. Also, make sure you choose someone who will be responsible since missed payments could hurt your credit.

4. Monitor your credit report and score

It’s always a good idea to check your credit report at least once every year to make sure there aren’t any inaccuracies driving down your score. If your goal is to improve your credit, you may want to check your score more often so you can celebrate your successes. Consider a service like Credit Sesame to keep tabs on your score for free.

How many credit cards is too many?

How many credit cards you should have is totally up to you. For some people, “too many” could be a single credit card. For others, it could be five or more. And in some cases, it’s relatively easy for someone to juggle more than 20 cards without overspending or missing payment due dates.

For credit score purposes, it’s possible to have an excellent credit score with one card or dozens of cards — it doesn’t make much of a difference as long as you’re using your cards and paying off their balances. But if you find yourself making late payments on your cards, you may have crossed the line where you now have too many. You’ll also want to make sure that the annual fee on all your cards doesn’t create too much of a burden compared with the benefits you’re receiving.

The key is to do what feels comfortable. You might find it becomes easier to add more cards after you’ve used one for a while. Or you might not. Either way, the best move for you is to use credit cards as a tool that helps you financially, whether it’s with one, a few, or loads of cards.

FAQs

How many credit cards do you need to build credit?

You typically don’t need more than one credit card to build credit. Having multiple credit cards isn’t likely to do more for building your credit because it’s the same type of credit product. However, having a credit card, car loan, and mortgage might be more beneficial for your credit because you’re using different products.

Is three credit cards too much?

Whether three credit cards is too much depends on your situation. If you frequently have trouble paying the balance on one credit card, three is likely too many to have. But if you don’t have any issues with using credit cards and then paying off their balances on a regular basis, three or more credit cards should be fine.

Is it bad to have a lot of credit cards with zero balance?

It’s typically in your best interest to pay off the balance on your credit cards so you don’t accrue interest or have any late payments. In addition, having cards with high balances could affect your credit utilization, which could have a negative impact on your credit score.

However, there’s a balance to be made. In some cases, a card issuer could close your credit card account if you never use it. This could also negatively impact your credit score because the average age of your accounts would be affected.


Bottom line

Credit cards, when used correctly, are an amazing tool that could open up doors to financial opportunities throughout your life. This could include getting the loan for your dream car, closing on your first house, traveling the world, and so much more.

Yes, the effects of the best credit cards can be huge and far-reaching. But that doesn’t mean everyone should have as many credit cards as possible.

Remember to start slowly if you’re just beginning — one new credit card might be more than enough for you. If you feel comfortable and it’s not a problem to pay off your credit card debt each month, consider integrating more credit cards into your everyday life.

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Author Details

Ben Walker, CEPF, CFEI® Ben Walker, CEPF, CFEI®, is a Senior Credit Cards Writer at FinanceBuzz. For over a decade, he's leveraged credit card points and miles to travel the world. His expertise extends to other areas of personal finance — including loans, insurance, investing, and real estate — and you can find his insights on The Washington Post, Debt.com, Yahoo! Finance, and Fox Business.
Lindsay Frankel Lindsay Frankel is a Denver-based freelance writer who specializes in credit cards, travel, budgeting/saving, and shopping. She has been featured in several finance publications, including LendingTree. When she's not writing, you can find her enjoying the great outdoors, playing music, or cuddling with her rescue pup.

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