How Many Credit Cards Should I Have?

Written By
Julija A.
March 15,2022

Americans love using credit cards for purchasing goods. In 2020 alone, they opened 377 million new credit card accounts. That’s a lot of credit cards. In fact, according to the Experian Consumer Credit Review, the average American owns four

Is that too much? Should you limit yourself to just one credit card, or should you open multiple accounts with several banks? There’s no single, one-size-fits-all answer to this question. Let’s discuss why.

Factors to Consider

How many credit cards you should have depends on several factors, including your financial situation, spending habits, and your current and future financial needs. Although we can’t provide you with a straightforward answer to this question, we can explain the benefits of having multiple cards, the optimal number of cards that a person should have, and what to watch out for.

Your Spending Habits

If you have ever been stuck in debt due to unpaid credit card bills, you already know that a bundle of credit card accounts might not be the best solution for you. But, if you already manage a few credit card accounts successfully, another one might bring you some extra benefits. 

Your Experience With Various Financial Products

Having one credit card is generally the safest option for first-time users. If you didn’t have a credit card before, you want to keep it simple in the beginning and establish a good credit score before opting for the next financial product. 

Your Credit Card Options

Getting a credit card is not always as easy as many consumers think. First of all, you need to be at least 18 years old to apply for one. Secondly, you’ll need to find a bank that provides credit cards for young people who don’t have an established credit history

How Credit Cards Influence Your FICO Score

When applying for multiple credit cards, the most important question to answer is how it’s going to affect your FICO. The number of credit cards you open influences your credit score in ways that are often unexpected and can further affect your borrowing ability for loans or other financial products. 

Let us first say that credit cards can be successfully used as financial tools for boosting your credit score and helping you qualify for personal loans or mortgages with higher limits. Some providers offer credit cards specially designed for improving credit scores.

Generally, credit bureaus look positively on consumers who have more credit card accounts. When calculating your credit score, different credit bureaus use different scoring models. But regardless of the model they use, having five or more accounts - credit cards and loans - positively affects your credit score. Of course, if you make regular payments. 

On the other hand, credit scoring models might have difficulties calculating your credit score if you have few accounts. Having less than five accounts means that they work with a “thin file,” which is hard to score. Looking at it this way, the answer to the question, “Is it good to have a lot of credit cards?” is “Yes.” 

The best way to understand and predict how a credit card or any new line of credit will influence your credit score is to try and see the situation from the potential lender’s perspective. What they, at the end of the day, strive to assess is whether you’re trustworthy enough to be lent money. Nobody wants to end up with a pile of bad debt they have no hope of collecting. 

Having a credit card or multiple cards means you have experience with handling borrowed money, which is reassuring for lenders. However, it’s not just about whether you have experience; it’s also about how you handle those funds. Having a credit card and being late with your payments is worse than having no credit history at all because it’s a signal you have problems managing your finances in a responsible way.

With that in mind, let’s now go through the pros and cons of having multiple cards.

Benefits of Having Multiple Credit Cards 

There are two main positive sides of having more than one credit card:

They Can Improve Your Credit Score 

As we’ve already mentioned, credit bureaus will appreciate it if you have a mix of credit cards and bank accounts. That’s because when fed information from a hefty credit file, credit scoring models will easily and with more certainty calculate your credit score. However, to put those myriad credit cards to good use and improve your score, you need to monitor and limit your credit utilization ratio. 

The credit utilization ratio shows how much credit you use compared to how much is available to you. Consumers with good to excellent credit scores use 10% of their credit limits. To put this into perspective, let’s take an example. If your credit limit is $100 on one card, you shouldn’t spend more than $30, and ideally, not more than $10. 

To achieve a low credit utilization ratio across their cards, experienced credit card users have several credit cards and never reach more than 30% of their credit limit per credit card, which is how much of your credit you should use, according to experts. So, to continue with our example, if you have two credit cards with a credit limit of $100 each, you’d be better off spending $30 from one card and another $30 from the other instead of not using one card at all and spending $60 from the other.

You Get More Rewards and Bonuses

Another advantage that comes with several credit cards is that you can get various rewards and bonuses. Of course, before getting a credit card, think about where you’ll use the credit card and how you’ll spend your money. Different credit cards have different reward programs, and it’s crucial to choose those that fit your spending habits and lifestyle.

For example, it’s logical to apply for a credit card with a travel reward program if you travel frequently. Different credit card issuers offer various credit card perks, like free miles, travel insurance, or free hotel rooms. Cashbacks on selected purchases are also among common credit card benefits.

Downsides of Applying for Multiple Credit Cards at Once

An array of credit cards is obviously beneficial when speaking in terms of rewards and additional bonuses. However, there are also downsides when it comes to applying or having several credit cards at the same time.

Although more credit cards can help you build your credit score, they can also negatively impact your creditworthiness, especially if you apply for more than one credit card at the same time. That’s because credit card companies can start suspecting you’ve applied for multiple credit cards at the same time just to benefit from the welcome bonuses. Since many such customers cancel their credit cards afterward, credit card issuers impose additional eligibility requirements.

Conclusion - How Many Credit Cards Is Too Many?

To answer this question, you need to also consider your future financial moves. If you plan to get a car or a house loan, then having dozens of credit cards is not a good idea. Even if you make regular payments and know how to keep your credit utilization ratio low, lenders might not be too open to borrowers who already have several credit lines opened. 

The optimal number of cards depends on your spending habits, income, and experience. Once you know all about the pros and cons of owning multiple credit cards, you will be more capable of making the right decision on your own.


Is three credit cards too many?


It depends on whether you are capable of keeping track of all of them and making regular payments or not. Generally, credit bureaus encourage having more than five credit cards as they can easily calculate your credit score. Additionally, you can boost your credit score if you know how to successfully manage multiple cards. 

However, three credit cards or more can be too many if you’re an inexperienced user of credit cards and other financial tools, if you can’t put the rewards and bonuses they come with to good use, or if you simply feel like handling so many cards is making your life unnecessarily complicated.

How many credit cards should the average person have?


An average number of credit cards per person is four, according to research conducted by Experian. However, each consumer’s financial situation and spending needs are different, so everyone should decide for themselves. It’s worth noting that you don’t have to have a single credit card - you can use debit cards linked to your checking account instead. That way, you’ll only use the money you already have - and won’t have to pay interest on the money borrowed.

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


Generally, a zero balance on your account can help you lower your credit utilization ratio. That way, you can increase your credit score. But, having zero balance for a long time might lead to closing a credit card account by the issuer and thus negatively impact your credit score. 

About author

Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.

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