Credit & Finance

How Many Credit Cards Should You Have?

Written by Brian O'Connell for Symantec

What’s the “sweet spot” for the number of credit cards you should own?

Just one? Maybe two. OK, how about three or more?

According to 2015 research by Gallup, 76 percent of American consumers have at least one credit card. And the average number of cards they have is 3.4. But what works for the average American may not work for you.

Determining the right number of credit cards for you

While experiences vary, there are equally both good and bad reasons to own multiple cards as there are good and bad reasons to own fewer cards. And there's even a good argument to be made that having two, three or even four credit cards is OK—as long as you’re paying your credit card bills on time, every time, and not running up significant credit card debt.

“If you are responsible enough to pay off your credit cards each month, then having multiple is not an issue,” says Kelan Kline, co-founder, along with his wife, of "The Savvy Couple" blog. “For starters, the more credit cards you have, the more credit limit you have. We normally have three to four at a single time. We primarily use one for personal use and one for our business. The others we have are in case of emergencies and larger purchases.”

As you consider the number of credit cards you should have, here are some considerations to keep in mind—on both sides of the issue.

4 benefits of having more credit cards

  1. Receiving more rewards – The more credit cards you own, the more credit card rewards you can earn. Specific perks may include cash back, airline miles, accumulated card points, and hotel and rental car discounts. Typically, the better your credit score, the more likely you’ll be approved for credit cards that offer rewards and other perks. But be sure to keep an eye on card fees. You don’t want the costs outweighing the benefits.
  2. Boosting your credit score by improving your debt-to-credit utilization ratio – By having multiple credit cards, you can spread your balances around instead of loading them up on one card. That’s important, since lower (versus higher) credit card balances (defined in the industry as a credit card “debt/utilization” ratio), are good for your credit health.
  3. Using a separate card for different types of purchases (easier bookkeeping) – Cardholders who need to “split” their spending (like Kline, who wants a personal credit card and a business credit card), find it much easier to separate their private and commercial spending into two cards.
  4. Accessing additional credit more quickly in case of emergency – With lower card balances spread out among multiple cards, banks will be more willing to approve a higher card credit limit for you, and that can come in handy for emergency spending.

There are, however, some red flags with having too many credit cards. “If you're using cards as a way to finance things you can't afford, and you're carrying growing balances, that's as good a reason as any to pay them off and close some of those cards down,” says Kristin McGrath, editor of Credit Card Forum.

4 benefits of having fewer credit cards

  1. Easier to manage payments – For some cardholders, simplicity is key with not just their cards, but with their finances. With a single card, you’ll have only one monthly card payment to handle. That can make it easier to focus on paying down the card’s debt on a timely basis, thus improving your credit health.
  2. Less temptation to spend – No doubt about it, having only one card can limit your spending opportunities. That’s a significant benefit for financial consumers who need all the help they can get to rein in personal spending.
  3. Easier time managing debt because of lower total credit limit – With a single credit card, you’ll have an overall lower credit limit available, thus removing the temptation to overspend. That’s a big deal to younger cardholders, especially those who are trying to save for a new home, pay off college debt, or focusing on boosting their overall credit health.
  4. Easier to apply for a new card when the need arises – Credit card companies are more likely to approve a credit card for applicants who have only one or two cards. To card companies, the lower your overall credit card balance, the lower the risk you’ll default, and thus, the less likely they’ll have to chase you down for payments.

If you have one credit card and want to get a second one, it’s doable, but only under certain conditions. “If you commit to paying off your balances in full and have no problem doing so, you can make the argument for more cards,” says McGrath. “But make sure you have a purpose for those cards beyond having a wallet full of plastic.”

The downsides of having too many credit cards

There are some negative aspects to having too many credit cards. For starters, there’s the “overwhelming” factor of having to manage them all.

Aside from the multiple bill payments, you will need to keep track of rewards (both earned and used), deal with the threat of higher credit card debt with more cards, and maintain the security of your cards. Think about it: Having two or more credit cards automatically increases your risk of someone stealing your card or card number. (If this happens, though, having a backup credit card in the event another card is lost or stolen might be a good idea.)

“It seems many people get so caught up in having too many cards that they get overwhelmed,” says Kline. “In our opinion, a credit card should never be used unless you already have the money to pay it off. Holding credit card debt on multiple cards is a great way to get stuck in debt for years. The interest rates are extremely high, and that makes it very difficult to cut into the principle that you own.”

If you want to cut down on the number of credit cards you have, be careful

Cardholders who do seek to reduce the amount of plastic they’re carrying should plan first.

For starters, closing an active credit card can have a detrimental impact on your credit score. That’s because canceling a card means you lose the available credit on that credit card, increasing your “debt/utilization” ratio—the percentage of your overall credit that you’re using. Such an increase could lead to a dip in your credit score. (Learn more about credit scores in this article.)

A better move is to pay down the card’s debt to five or ten percent of the available credit limit, but keep the card active. Cut it up with a pair of scissors or put it in a vault—just don’t use the card. That way you’ll benefit from having all that available credit you’re not using—something that can help your credit score—but you’re not using the card to run up more debt.

How to decide on the number of cards you should have

While everyone’s mileage will vary on the number of credit cards carried, there are some numerical “slots” to use as a blueprint when deciding on the ideal number of credit cards.

HOW MANY CREDIT CARDS SHOULD YOU HAVE?
Number of CardsIf you're ...
1… concerned about overspending, are focused on simplification, or you’re younger and working on a number of personal financial issues (i.e., paying off college debt or saving for a starter home), a single credit card can be a good idea.
2… in need of a “backup card,” own a business and want to split your private and business spending in two, or if you are concerned about having a single card compromised by identity thieves, then two cards may be your sweet spot.
3+… highly organized, have great credit, and want to shop around for the most (and best) card rewards benefits, then having three or more cards can meet your unique needs—as long as you’re careful, keeping a close eye on each card.


Make managing your credit cards a priority

The takeaway? The number of credit cards you have isn’t as significant a personal financial factor as doing the things that improve your credit health. Those moves—including paying your bills on time, keeping spending low, planning your financial future, and helping protect yourself against identity theft—should be a bigger priority than counting and tracking the number of cards you own.

If managing multiple cards gets in the way of mastering your personal finances, then maybe it’s a good time to sit down, review your situation, and simplify your financial life—by reducing the number of credit cards you own.

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