How many credit cards should you have?

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When it comes to managing your finances and building credit, one of the most common questions people ask is, "How many credit cards should I have?" The answer isn’t always as straightforward as you think. 

The right number of cards varies from person to person. It depends on your credit score, spending habits, financial goals, and ability to manage multiple cards.

How many credit cards should I have? 

The ideal number of credit cards varies from person to person. Still, a general rule of thumb is to have at least two: one primary card for everyday spending and one backup card for emergencies or situations where your primary card isn't accepted. 

However, depending on your financial goals and spending habits, you may benefit from having additional cards that offer rewards or perks tailored to you.

The average American has 3.84 credit cards, according to Red Ventures. But it’s important to note that this is an average — there’s no perfect number of credit cards that apply to everyone. 

Some people can manage five or more cards, while others may find that one card is more than enough. The magic amount of cards for you is the number you can comfortably manage while avoiding unnecessary debt or fees.

How many credit cards are too many (or too few)?

Having too many or too few credit cards can have different financial implications. 

Too many credit cards

Signs that you may have too many credit cards in your wallet are: 

• You struggle to keep track of multiple due dates and payment amounts
• You find yourself overspending to earn rewards on multiple cards
• You're paying multiple annual fees without getting enough value from the cards' benefits
• Your credit score has dropped due to too many recent applications or high credit utilization
• If not used responsibly, having too many credit cards can lead to missed payments, increased debt, and a lower credit score.

Too few credit cards

On the other hand, having too few credit cards can also have drawbacks:

• You may miss out on valuable rewards or perks that could save you money 
• You may have a higher credit utilization ratio, which can lower your credit score
• You may have less flexibility in case of a financial emergency or if your primary card is lost, stolen, or not accepted

While building credit and managing your finances with just one credit card is possible, having at least two can provide greater flexibility and potential benefits.

Benefits of having multiple credit cards

Having more than one credit card can offer several advantages, including:

• Maximizing rewards: If you're strategic, juggling cards with rewards in different spending categories can help you maximize points, miles, or cash back. For example, you might use a travel rewards card for airfare and dining purchases, a gas rewards card at the pump, and a flat-rate cash back card for everything else, says financial advisor R. J. Weiss, author of The Ways to Wealth. 
• Increase your overall credit limit: Each new credit card you open extends your overall credit limit. This provides more flexibility, which can be useful for large expenses or emergencies. A higher credit limit can also help keep your credit utilization ratio low, which is good for your credit score. Credit expert John Ulzheimer says he believes any number of cards can work as long as consumers maintain a credit utilization ratio under 10%.
• Take advantage of perks: Premium cards often come with benefits like airport lounge access, free checked bags, or travel credits. Carrying a couple of different cards can help you get the most value from these perks.
• Capitalize on welcome bonuses: Many rewards cards offer generous sign-up bonuses to new cardholders who spend a certain amount, usually in the first few months. Going after multiple bonuses is a smart way to rack up a stash of points or miles toward a vacation or other goal. Just be sure you can responsibly meet the spending requirement and pay off your balance. 
• Build your credit mix: If you have little credit history, demonstrating that you can responsibly manage different types of credit accounts, like credit cards and installment loans, can help boost your credit score over time. Adding another card to the mix may benefit you from this perspective.

Drawbacks of having too many credit cards

On the flip side, there are also some potential drawbacks to be aware of with multiple credit cards.

• Multiple annual fees: Premium cards with perks often charge annual fees to offset those benefits, sometimes in the hundreds of dollars. Those fees can add up when you carry several cards, potentially negating the value you get from the rewards and benefits.
• Harder to track spending: When you use many cards, it's more difficult to monitor your total charges and stay within your budget across all those accounts each month. You also have more due dates and bills to pay, which can become overwhelming to manage.
• Easier to overspend: A higher overall credit limit spread across multiple cards means more temptation to spend and a greater risk of debt if you aren't disciplined, says Lawrence Sprung, financial advisor and author of Financial Planning Made Personal. 
• New credit inquiries: Each time you apply for a new credit card account, the issuer pulls your credit report hard. Too many inquiries in a short period can temporarily ding your credit scores. While the effect is minor, it's something to consider before going on an application spree.

How to find the right number of cards for you

So, how can you determine the ideal number of credit cards for you? It all comes down to your situation — and ability to manage multiple cards, says Weiss. Here are some factors to review. 

Your spending habits and budget

The first step is to examine your typical monthly spending patterns. How much do you charge to your credit cards currently? Do you tend to spend up to your limit, or do you reliably pay your full statement balance each billing cycle?

Your answers will help determine whether you can manage multiple credit cards or if it's wiser to stick to one or two primary cards. Be honest about your money habits and any debt you may carry.

Your credit scores and history

Where you fall on the credit score scale can also help guide your credit card strategy. If you're new to credit or have a lower score, starting slowly with one card is generally better. Focus on charging only what you can afford to pay off and always making on-time payments to build a positive payment history. You can add another card after demonstrating responsible use.

"A sign that you have too many cards is you can’t afford to pay them all in full each month," says Ulzheimer. 
If you already have very good to excellent credit scores, you may be able to handle additional cards wisely. Just be sure a new card fits your spending habits and offers rewards or perks you'll use.

Your financial goals 

Think about what you want to accomplish with credit cards, and let that shape your decision. Are you primarily looking to earn cash back or travel rewards? Do you need to finance a large purchase and pay it off over time? Focusing on one or two goals and choosing the best cards for those objectives is better than chasing every shiny offer.

How to manage multiple credit cards

If you decide having more than one card aligns with your spending habits and financial goals, follow these tips to keep your credit in good shape:

• Set up autopay: Automatic payments help ensure you're never late on a credit card bill, which is crucial for avoiding fees and damage to your credit scores. You can usually set your payments for the minimum amount due, full statement balance, or a custom amount.
• Track your spending: Use a budgeting app or a spreadsheet to monitor your purchases across all your card accounts. Regularly review your statements to catch errors or fraudulent charges and dispute them as soon as possible. Aim to keep your total charges well below your credit limit on each card.
• Be selective with applications: Resist the urge to apply for multiple credit cards close together, as this card causes your score to drop. If you see a card you're interested in, research the qualification criteria to assess your approval odds before applying. Certain online tools can also help determine your likelihood of getting approved without a hard inquiry.
• Keep old accounts open: Unless an older card has an annual fee you feel is no longer justified, it's generally better for your credit utilization and the average age of accounts to keep unused cards open. Cut up the physical card to avoid using it, but don't close the account completely.
• Regularly evaluate your card lineup: Every year or so, take inventory of all your credit cards and the value they're providing. If some aren't pulling their weight regarding rewards, perks, or credit-building, it may be time to upgrade or replace them. The credit card market is constantly evolving, so ensure you get the best bang for your buck.

When you should close a credit card

There are times when it makes sense to close an account you already have:

• The card has a high annual fee, and you're no longer getting enough value to justify the cost 
• You don't use the card at all anymore and don't anticipate needing it in the future 
• You've upgraded to a better version of the card with the same issuer 
• You tend to overspend when you have available credit and want to remove the temptation 
• You're going through a major life change like divorce and want to close joint credit card accounts

Before closing a credit card, consider the potential effect on your credit scores. Closing an account reduces your total available credit, which can increase your credit utilization ratio if you're carrying balances on other cards. It can also lower your average age of accounts over time as the closed account drops off your credit reports.

If you still decide closing the card is the right choice, redeem any rewards first. Then, contact your card issuer to cancel the account and send written confirmation.

The bottom line

Only you can decide the right number of credit cards for your wallet. Multiple cards can offer a lot of value if you use them strategically to maximize rewards. But careful management is also required to avoid overspending or damaging your credit.

Start with one or two credit cards that match your spending patterns and goals. As you get comfortable using them responsibly over time, consider adding another card to the mix to access new rewards categories, sign-up bonuses, or benefits you value. 

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.