How Many Credit Cards Should I Have?

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Updated on Thursday, February 22, 2018

In today’s overcrowded credit card market, issuers are constantly competing to win over consumers by offering various rewards and benefits. Looking at all the cards available, you may wonder if there’s one card that can meet your needs, and odds are there isn’t a “perfect” card. That’s when having more than one credit card can be beneficial.

Not only do you have the potential to maximize rewards and savings, but you can also raise your credit score. However, keep in mind there are some pitfalls to watch out for and you should make sure you can responsibly manage multiple cards.

How many credit cards should I have?

There is no set number of credit cards for you to have, but a survey by Experian found the average number of credit cards Americans have is 3.1. This is a reasonable amount of cards to have and when managed responsibly can allow you to maximize rewards and savings. A key point to consider when deciding how many credit cards to open is your credit score.

If you have bad credit, you may not qualify for many cards and may have issues managing just one card. Since, adding several cards to your wallet has the potential to lower your score, it may be better to work on building credit before you open multiple cards. On the other hand, if you have a good or excellent score, you’re someone who has the hang of responsible credit management and can most likely manage several cards.

How do multiple cards affect my credit score?

Having multiple credit cards has the potential to both positively and negatively impact your credit score, depending on how you use your card. Below, we break down the key factors of your credit score, and the effects multiple credit cards have on each factor.

Utilization rate

Credit card utilization is the amount of your credit limit that you use across all of your cards, and makes up 30% of your FICO® Score. We consider a credit utilization below 20% ideal, but at least aim for 30% or under. If you have more than one credit card, your total credit limit will increase and you can more easily keep a lower utilization than if you had one card. But, a larger credit limit can be tempting for people who aren’t responsible with their credit and may lead to overspending, therefore negatively affecting their credit score.

The potential positive effect multiple cards have on your utilization is best explained in an example where Joe has three credit cards and Mary has one.

  • Joe’s total credit limit is $10,000 — $5,000, $3,000 and $2,000 for each card.
  • Mary’s total credit limit is $2,000 — on one card.

Now, if Joe and Mary spend $1,000 each a month, their utilizations would be:

  • Joe: 10%
  • Mary: 50%

As you can see, Joe can more easily maintain a lower utilization rate than Mary when spending the same amount of money. However, since he has a higher credit limit, he needs to practice responsible credit management and not overspend.

Average length of credit history

Each time you open a credit card, the average length of your credit history decreases. This can lower your credit score since length of accounts open makes up 15% of your FICO® Score. For example, if you have three cards opened in 2000 (18 years ago), 2016 (two years ago) and 2017 (a year ago), the average length of your credit history is seven years.

While if you only had the card opened in 2000, it would be 18 years. That’s a big difference and can lead to a slight decrease in your credit score until the average length of your accounts is greater.

Hard pulls to your credit

When you apply for a credit card — regardless if you’re approved or not, the credit card company performs a hard pull on your credit. This negatively affects your credit score, although it will bounce back in several months. The more applications you submit, the more hard pulls you’ll receive. A great feature many cards have is pre-qualification which lets you know if you may qualify for a card via a soft pull on your credit.

Soft pulls don’t affect your credit score and can be a good way to shop around for credit cards without hurting your score. Remember that once you submit an application, a hard pull will be done.

Payment history

Payment history is one of the most important factors comprising your FICO® Score, making up 35% of your score. Therefore, it’s important to pay each statement on time and in full so your credit score doesn’t drop and so you avoid late payment fees or penalties. Having more than one credit card may make it hard to do that, since you have to manage payments for several accounts with different due dates. However, there are some things you can do to potentially avoid any late payments — some credit cards allow you to choose a payment due date which can enable you to have all your bills due the same day, or you can set up autopay.

What are your goals?

Before you decide to open a credit card, it’s important to decide what you plan to use the card for so you can choose the one that best meets your needs. You may want to build credit, earn rewards or get out of debt, and there are cards for all those goals.

Building my credit score

If you’re someone with less than perfect credit or are new to credit, you may want to choose credit cards that help you build credit. There are secured cards that offer favorable terms and can provide you the resources to begin your credit journey or improve it. You can also consider asking for a credit limit increase on your current card to improve your utilization rate.

Taking advantage of rewards

When used responsibly, credit cards are a great alternative to cash and provide you with various options to earn rewards or cash back. You can be rewarded for everyday spending, meeting sign-up bonus requirements, adding authorized users and more depending on the card. The rewards or cash back you earn can be redeemed in a variety of ways from statement credits to lower your bill, to travel, merchandise and more. Whether you want to earn flat-rate rewards or higher rewards in certain categories, there’s a card for you to benefit from.

Getting out of debt

Some people may look at credit cards as a way to get out of debt, and they can be helpful with many cards offering 0% intro periods for long periods of time. With a 0% intro period, you can transfer a balance or make a purchase and not be charged interest for the given time period (note that terms apply). This is a great way to save on the typically high interest rates credit cards charge.

Cards to consider

Once you’ve decided to open a new credit card, you may become overwhelmed by the hundreds of options available. So, we’ve listed some of our favorite cards below that can be used for various reasons to make your decision a bit easier.

Balance transfers

The Citi Simplicity® Card - No Late Fees Ever has the longest balance transfer intro period of any card in our database and provides you with plenty of time to pay off your debt. It offers an intro 0% for 18 months on Balance Transfers then a 14.74% - 24.74% (Variable) APR. There is a $0 annual fee and although there are no rewards, you can benefit from the potentially money-saving feature Citi® Price Rewind. Keep in mind good or excellent credit is needed to qualify. Read our roundup of the best balance transfer cards and use our customizable tool to compare balance transfer cards here.

Citi Simplicity® Card - No Late Fees Ever

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The information related to Citi Simplicity® Card - No Late Fees Ever has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Citi Simplicity® Card - No Late Fees Ever

Intro BT APR
0% for 18 months on Balance Transfers
Balance Transfer Fee
Balance transfer fee – either $5 or 3% of the amount of each transfer, whichever is greater.
Regular Purchase APR
14.74% - 24.74% (Variable)

New purchases

The Capital One® Quicksilver® Cash Rewards Credit Card lives up to its name and is a straightforward card with a $0 annual fee. The intro period for purchases is one of the longest we found and can provide you with the time needed to pay off any lingering balances before the intro period ends. You can earn 1.5% Cash Back on every purchase, every day. People with excellent/good credit may qualify for this card. Read our roundup of the longest intro 0% purchase cards and use our customizable tool to compare 0% intro cards.

Travel rewards

 Chase Sapphire Preferred® Card

The information related to Chase Sapphire Preferred® Card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Chase Sapphire Preferred® Card

Regular Purchase APR
15.99% - 22.99% Variable
Annual fee
$95
Rewards Rate
2X points on travel and dining at restaurants, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases worldwide.

The Chase Sapphire Preferred® Card is a great choice for frequent travelers looking to maximize travel rewards. This card has a rewards program that is enhanced by the 25% more value points received when redeemed for travel with Chase Ultimate Rewards®. The annual fee ($95) is also reasonable considering most travel cards have annual fees around $450, and this card still comes with a lot of the same benefits, like no foreign transaction fees and baggage-delay insurance. To qualify for this card you need to have excellent credit.Read our roundup of the best travel rewards cards here.

Cash Back

Citi® Double Cash Card – 18 month BT offer

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The information related to Citi® Double Cash Card – 18 month BT offer has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Citi® Double Cash Card – 18 month BT offer

Regular Purchase APR
13.99% – 23.99% (Variable)
Annual fee
$0
Rewards Rate
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.

The Citi® Double Cash Card – 18 month BT offer is our top pick for a cash-back card with its competitive flat-rate rewards program that provides cardholders with a simple way to earn a high cash-back rate on all purchases. In addition, there is a long offer at an intro 0% for 18 months on Balance Transfers (after, 13.99% – 23.99% (Variable) APR) that also gives you the opportunity to get out of debt while continuing to earn cash back on new purchases. This card does require good or excellent credit to qualify.Read our roundup of the best cash back cards and use our customizable tool to compare cash back cards.

Bottom line

At the end of the day, it’s ultimately your decision if you want to open additional credit cards. While they can be beneficial, you need to consider your financial situation and your goals to decide if you can manage another card.

Then, once you’re confident that you want to apply for another card, shop around to see which card can provide you the most benefit. We have several pages dedicated to rewards cards, cash back cards, balance transfer cards, and 0% purchase cards to help you find the right card.

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