If used strategically, credit cards can be an amazing tool. They can give you more flexibility in your spending, allow you to earn valuable rewards, and you can take advantage of benefits like free car rental insurance and purchase protection.
With so many great signup bonuses and reward programs available, you may be tempted to sign up for several different credit cards.
But can you have too much of a good thing? Below, find out how many credit cards you should really have.
Average credit card numbers
You’ve likely heard about people who juggle dozens of different credit cards. Before going that route, it’s a good idea to look at what’s “normal” for credit cardholders. According to Experian — one of the three major credit reporting agencies — the average American cardholder has 2.5 credit cards with an average credit limit of $20,265.
That data shows that most Americans are fairly conservative when it comes to carrying credit cards. So, you shouldn’t feel pressured to hold many different cards.
The minimum amount of credit cards you should have
That said, experts recommend that you have at least two credit cards from different card networks. Why? It gives you protection and security. For example, let’s say you only have a Discover credit card. Not all merchants accept Discover, so you could be left high and dry if that’s the only card you have.
Or, one of your credit card numbers could be compromised or stolen. If that happens and you only have one card, you could be left unable to pay your bills.
Having two cards — say, one Visa and one MasterCard — helps protect you in these situations. If you only want to have the bare minimum, you can use one card for your everyday spending, and leave one in a drawer solely for emergencies.
The maximum number of credit cards you should have
When it comes to the maximum number of cards you should have, the answer is dependent on your unique situation.
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Do you carry a balance? If you regularly carry a balance rather than pay off your statement in full each month, it may not be a good idea to sign up for another card. Carrying a balance across multiple cards can damage your credit, and can cause you to lose control over your debt.
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Do you have debt? If you have high levels of credit card debt or personal debt, adding another credit card could exacerbate the problem.
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Do you have a high-interest credit card? If you have a balance on a high-interest credit card, it may make sense to sign up for another card so you can take advantage of a low introductory APR with a balance transfer.
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Are the benefits that you need? If you travel often, it may be worthwhile to sign up for another card in addition to your main card to take advantage of perks like travel insurance.
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Will you have to pay annual fees? Some credit cards charge annual fees. If you have several different credit cards, you may end up paying hundreds or thousands just for the sake of carrying the cards.
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How organized are you? If you carry multiple credit cards, you have to juggle multiple balance statements, due dates, and minimum payments. It can be easy to lose track. If you opt for several cards, make sure you have a reliable system in place so you don’t miss a payment.
Your answers to the above questions will help you decide how many credit cards are right for you.
How multiple credit cards affect your credit
If you’re thinking of applying for another credit card, you’re likely wondering how it will affect your credit score.
When you apply for a card, the credit card company will perform a hard credit inquiry. A hard credit inquiry can lower your score by a few points, so it’s a good idea to spread out your credit card applications to avoid damaging your credit score too much.
However, having multiple cards can also increase your score. Once you have your cards in place, you’ll have access to a larger credit limit. If you keep your spending low, that means you’ll lower your credit utilization, a key factor in determining your credit score.
If you juggle several different cards and make all of your payments on time, you’ll also improve your credit because of your excellent payment history.
Juggling multiple credit cards
It’s important to understand your own spending and credit card management habits before submitting your applications. In some cases, it may pay off to be more conservative and keep only a couple of cards on hand. However, opening multiple credit card accounts can allow you to take advantage of reward programs and benefits, while boosting your credit score.
If you decide that you want to open a new credit card account, check out the best credit cards of 2022.