How Many Credit Cards Should I Have?
Written by Andrea Coombes
Edited by Carolyn Kimball
Fact-checked by Dayana Yochim
How many credit cards should you have? That’ll depend on your goals, but it’s possible to manage your finances and build your credit with one single card.
Quick take: Your goals will determine exactly how many credit cards are right for you, but if you’re looking to manage your finances and/or build your credit, you don’t need a lot of cards to do it. Two cases in point: I have four credit cards, my colleague Dayana Yochim has one card, and we both have credit scores above 800. From one to four credit cards is plenty for most people.
Tell me more! Well alrighty then... here you go: There are pros and cons to having more than one credit card.
1. First, let’s look at the benefits:
- Adding a credit card to your wallet will increase your total credit limit, which can help your credit utilization ratio. This ratio is one of the most important factors in your credit score, accounting for as much as 30% of your overall score. It measures how much you’re borrowing on your credit cards as a percentage of your total available credit.
The higher your total available credit limit and the lower your outstanding balance, the better your ratio. But that doesn’t mean you need to go out and apply for a bunch of cards. You can use one or two cards and simply pay off the balance in full every single month before the due date. (Or, at least get that balance as low as possible.) - You can play the rewards card game, using the best rewards card for a particular purchase. Now, if you’re trying to figure out the best rewards card for your situation, then check out our credit card rewards calculator. You can enter your own unique spending habits to see which card will pay you the most in cashback rewards. And our guide to the best cashback rewards cards will show you how to maximize your credit card rewards.
2. Now, let’s consider the downsides:
- Every time you apply for a credit card, it dings your credit score, at least a little bit, although temporarily. Hard inquiries such as applying for a card stay on your credit report for up to two years, though your credit score may recover from the hit faster than that.
- Having a lot of credit cards makes life more complicated. For example, you might overlook payment due dates. Be sure to make a plan for staying on top of those bills, because making on-time payments is the biggest factor in your credit score! A full 35% of your score is based on your payment history.
For each of my four credit cards, I have the apps on my phone next to each other. Every time I check the app of my regular bank, I check the other bank apps as well to see if there’s a balance on any of my cards, and if there is I immediately pay the outstanding balance in full. I like this method, but another way to handle it is to set up automatic payments, so you know your minimum balance is always paid no matter what. (If possible, be sure to pay off the complete outstanding balance before the due date.)
One more thing: You don’t need to carry a balance on your credit card to build your credit! You can have fantastic credit even if you pay off your balance in full every month. Bonus: You’ll avoid those outlandish interest charges. You definitely want to do that.
Bottom line: If you’re wondering how many credit cards you should have, then answer me this: What’s your goal? If you’re looking to build your credit, you don’t need a lot of cards to do it. If you want to play the rewards game, then adding some additional plastic to your wallet might make sense for you.
Did you know? Here’s the best way to build credit with a credit card:
- When paying your monthly credit card bill pay off the entire balance every month. It’s a myth that you need to carry a balance to build your credit. By paying off your balance in full, you avoid getting charged interest. That is a wonderful thing.
- Make on-time payments. This is key to building a strong credit file. Your payment history is the biggest factor in calculating credit scores, and paying on time is the essential ingredient.
- If you end up carrying a balance rather than paying in full every month, keep that balance as low as possible. Your credit score will take a big hit if the amount you owe is more than 30% of your credit limit. For example, if you’ve got a $1,000 credit limit, don’t let more than $300 sit unpaid on the card. And to set yourself up for the best credit score, try to keep your outstanding balance to 10% or less of available credit ($100 or less on a card with a $1,000 limit). Or take our advice and, if possible, simply don’t carry a balance at all.
Get more personal finance tips and strategies
- What credit is and why it matters
- How to fix your credit score
- How many credit cards should I have?
- How to start investing
- How to save for retirement
- Best high-yield savings accounts
- Best cashback credit cards
Check out investor.com’s personal finance education hub.
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About the Editorial Team
Andrea Coombes has 20+ years of experience helping people reach their financial goals. Her personal finance articles have appeared in the Wall Street Journal, USA Today, MarketWatch, Forbes, and other publications, and she's shared her expertise on CBS, NPR, "Marketplace," and more. She's been a financial coach and certified consumer credit counselor, and is working on becoming a Certified Financial Planner. She knows that owning pets isn't necessarily the best financial decision; her dog and two cats would argue this point.
Carolyn Kimball is Managing Editor for Reink Media Group and the lead editor for content on investor.com. Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.
Dayana Yochim has been writing (articles, books, podcasts, stirring speeches) about personal finance and investing for more than two decades, focusing on bringing clarity and the occasional comedic aside to what is often a murky, humorless topic. She’s written for NerdWallet, The Motley Fool, HerMoney.com, Woman’s Day, Forbes, Newsweek and others, and been a guest expert on "Today," "Good Morning America," CNN, NPR and wherever they’ll hand her a mic.
