Ok, let's just rip the band-aid off and get straight to it - How many credit cards is too many? There's no exact number of credit cards to have, and it varies for every credit cardholder. It’s certainly good to have one, but it wouldn’t be bad if you had two (or six!) credit cards sitting in your wallet today. What really matters is how you use it.
It's a frustrating answer, right? But don’t worry – I can explain….
The cool thing about credit cards is the benefits, and there are so many to choose from! There are store credit cards, cards specifically for air travel, and more credit cards offering cool rewards and perks like cash back or discounted rates at your favorite restaurant. Having options of which credit card to use before making a purchase can feel like you’re 100% covered where you have the flexibility you need for the unexpected. Especially if you're not carrying large amounts of cash.
As an undergrad, this was my question when I received multiple credit card offers in the mail. It was sooo tempting to apply because the offer meant more credit power at my disposal if approved. But I also had other questions that came with that:
These are all excellent questions to ask when you’re thinking about applying for another credit card and if you already have two or more. Understand there is a risk of having multiple credit cards and there are benefits but it depends on a few factors.
As I mentioned in the beginning, the ideal number of credit cards to have is not the same for everyone. It truly depends on how responsible you are with your cards and your credit history. Plus, if you're thinking about applying for an additional credit card, the lender may have their own criteria since each lender has its own level of risk, credit scoring system, and formulas when reviewing credit card applications.
The attractive part about having more than one credit card is when managed right, it looks good on your credit report. When lenders report your credit card or loan activity to the credit bureaus, they like to see that mix of credit on your report. The types or mix of credit you have factors in 10% of your credit score.
QUICK TIP: Just don't start applying and opening numerous credit cards and other lines of credit in a short time frame. It could heavily knock your credit score down. A good rule of thumb is to look into no more than 2 accounts per year. |
Having more than one credit card is great when you know what you're doing, but it can hurt you if you misuse the card and become an irresponsible cardholder. Here's a closer look at what I mean:
QUICK TIP: If you are struggling to manage multiple credit cards or feel like you're paying too much interest, consider doing a balance transfer where you consolidate your debt onto a credit card! Here's a closer look at when to consider doing a balance transfer. |
Risk of fraud: Credit cardholders experience identity theft, too. When you have multiple credit cards and can't keep track of them all, it's possible to lose one. If you experience identity theft, contact your lender right away. To avoid this from happening, start tracking your credit card expenses. We’ve outlined some tips to help you track here.
You may want to close a credit card because the fees may be too much to handle on top of that, it could be one less payment due date you have to worry about. Proceed with caution if you choose to close a credit card account because it can lower your credit score. Especially if it's an account that’s in good standing and has been open for several years.
Closing a credit card account can affect you in a few ways:
The good part about closing a credit card is you’re eliminating debt and you can focus on managing your other credit cards.
If you don’t want to reduce your average age or length of credit on your report, first pay off the debt on your credit card and limit the number of times you use it or don’t use the credit card at all. You can also freeze your card so you won’t be able to use the card on the fly but will have access to it if you ever need the extra cash flow and want to maintain the credit line.
Depending on the lender, your credit card account could be closed due to inactivity. If you limit the number of times you use the credit card and keep the balance low, this can work in your favor. You can buy one small thing like a pack of M&M’s or a pack of toilet tissue once a month and pay off the balance.
If inactivity is not a requirement for the lender and you're looking to reduce the temptation of spending, keep the credit card at home or grab some scissors and cut it up. Just don't forget your account information in case you need to request account records!
If you notice your credit card management is off the rails, then that’s the first indicator that you have too many credit cards and it’s time to rework your credit card management habits. If you’ve tracked your credit card spending before then you need to do it again because something has gone wrong to the point where you’re missing due dates or you’re going past your spending budget. Here’s how to get back on track with your finances
If you already have more than one credit card and you need help managing them all hope isn't lost! There are a few options you can take. You can:
Do a balance transfer: This is when you can transfer that hefty balance from multiple credit cards onto a credit card that'll help you save money in interest. if you take this route. make sure you know all it entails because a balance transfer is not for every credit cardholder.
Whether you’re on your first credit card considering getting another, or you’re on your fourth credit card considering getting your fifth credit card, the things to know before applying still remain the same. You should:
Here's an entire article with information that'll keep you informed about what to expect before getting a credit card:
If you have any questions or comments, our Customer Service Representatives are here for you. You can send an email, give us a call at 704.375.0183, or visit any of our branches.