How many credit cards should you have?

Depending on how you use them, credit cards can help you build your credit and manage your finances — or leave you with expensive, long-term debt. You’ll need to balance your credit card use wisely, including having the number of cards that’s right for you, to get the most benefit from your cards.

While no one can definitively tell you how many cards you should or shouldn’t have, here are some tips on how to find the right number for you. 

How many credit cards should you have?

The answer is different for everyone. And the number of cards that’s right for you could change throughout your lifetime.

For example, when you’re a student or young professional, you might want to avoid cards from retailers — which can have higher interest rates — and just stick with one major credit card. As you grow in your career, it may make sense to have a second card that you use for business expenses.

To determine how many credit cards are ideal for you, consider these factors.

• Your spending habits — If you have a budget and stick to it, multiple credit cards can be a good thing. But if you’re more of a spender than a saver, they may cause you to overspend.
• Your income — You’ll need to pay off your credit cards in full every month to avoid interest charges and debt. Figure out if you have sufficient income to do so while also paying all your other bills, like your mortgage and auto loan.
• Your current credit status — If you have a good credit score, you’re more likely to lock in favorable rates on a new credit card and won’t have to pay as much to use it. On the other hand, if you have fair or poor credit, you may be stuck with higher rates that make using credit cards more expensive.
• Your financial goals — Ask yourself why you want more than one credit card. Since multiple cards give you access to a larger credit limit, you may build credit if you maintain the same level of spending. If you want to maximize rewards and perks like cashback, airline miles and gift cards, multiple credit cards may also make sense.

When is it a good idea to have more than one credit card?

In some scenarios, having a number of cards is a good idea. If you’re already in a healthy financial situation with minimal to no debt, multiple credit cards can open the doors to a better credit score and rewards.

Having more than one credit card is also a great option if you’d like to track and separate your spending. You can use one card to pay for a certain type of expense like groceries and gas, and another to pay for everyday bills like utilities and car insurance.

When is it a bad idea to have multiple credit cards?

Sometimes, having multiple credit cards can do more harm than good. If you’ll be tempted to overspend, going this route can lead to significant debt. Also, if you intend to use a card to pay other credit card bills, multiple cards may cause even more financial troubles.

If you know you’ll have trouble keeping track of and making multiple payments, you should probably stick to one card. Lastly, if you plan to claim the rewards you earn from a card and never use the card again, multiple cards may not be the wisest choice for you.

How does having multiple credit cards affect credit?

Multiple credit cards can affect your credit report and credit score in both positive and negative ways. Since payment history is the most important factor in determining your FICO score, on-time payments can help your score. Late or missed payments will do the opposite and lower your credit score.

Another crucial factor in your score is your credit utilization ratio, or how much of your available credit that you use. Every time you open a credit card, you’ll receive a new limit and increase your available credit. As long as you maintain the same or a similar level of spending as before you opened the card, you can improve your credit utilization ratio.

Your credit score also considers the average length of time you’ve had credit. When you open a new credit card, you’ll reduce the average age of your credit accounts. While new credit card accounts may lower your score by a few points for a short period of time, it could bounce back within a few months. But if you open new credit cards too often, the negative impact on your credit score will last longer.

What are the pros of multiple credit cards?

Here are some benefits to having multiple credit cards.

• More credit card rewards — If you open multiple credit cards, you can take advantage of a variety of reward programs. You may use a card that offers the most cash back on dining out at restaurants, and the card with the best travel perks on airfare or hotel purchases.
• Credit may improve — By paying your card balances on time and in full every month, you can build and improve your credit. Better credit can lead to lower interest rates and more favorable terms in the future.
• Backups — In the event one of your credit cards gets lost or stolen, it’ll likely take a few days to get a replacement card. With multiple credit cards, you’ll have backups to use in these situations.

What are the cons of having more than one credit card?

Having more than one credit card can come with some drawbacks, too.

• Risk of debt — If you’re already in credit card debt or tend to overspend often, multiple cards can be risky. They can make it easier for you to live above your means and get into debt.
• Credit may suffer — Late or missed payments on your credit cards can take a serious toll on your credit. Credit issues can limit the types of loans and other financial products you get approved for and cost you extra money in interest.
• Annual fees can add up — Many credit cards charge annual fees. If you have multiple cards, the cost of annual fees may get expensive.

What to know about applying for a credit card

Applying for credit cards is typically fast and easy. Most credit card issuers allow you to apply online and get a decision quickly. You can expect them to check your credit and income to make sure you can afford the card. Remember that every credit card you get will affect your credit. Many factors — including your payment history — will determine whether your card helps or hurts your credit.

Some credit cards to consider

Blue Cash Everyday® Card from American Express

• Annual fee: $0
• Noteworthy perk: 3% cashback at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%)
• May be good for: Those who use their cards for groceries, gas and at department stores

The Platinum Card® from American Express

• Annual fee: $695
• Noteworthy perk: Spend $6,000 on purchases in the first six months and earn 100,000 Membership Rewards® Points
• May be good for: Power travelers who can quickly and easily accrue enough points to balance the annual fee

Citi Custom Cash℠ Card

• Annual fee: $0
• Noteworthy perk: Earn 5% cashback on purchases in your top eligible spend category each billing cycle, on up to the first $500 spent (then 1% cashback after that )
• May be good for: People with good to excellent credit who want a rewards card without an annual fee

Citi® Diamond Preferred® Card

• Annual fee: $0
• Noteworthy perk: 0% intro APR for 18 months on purchases from date of account opening and 0% intro APR for 18 months on balance transfers from date of first transfer
• May be good for: Those who want to pay off a lot of debt and reduce their monthly payments

The most important things to know about credit cards

Credit cards are neither inherently good nor bad. Whether they’re good for you depends entirely on how you use them. If you do use them, be sure to make your payments on time and in full every month to avoid interest charges. Do your best to avoid going into credit card debt — it’s expensive, and grows quickly.