How Many Credit Cards Should I Have?

How many credit cards should you have? That depends on you and your goals. We’ll talk more about that in a sec. But first, there’s really something you should know: You can manage your finances and build your credit with one single credit card.

Just ask my colleague, Dayana Yochim. She’s relied on a single credit card for years, and her credit score tops 800. Even before she had a mortgage or other loans on her credit report, her long history of responsible use of that single card pushed her score into the high 700s.

For my part, I’ve got four credit cards, two that I keep solely for their extra-long credit history (I guess that’s a very small perk of getting older?). I’ve had those two cards forever. I keep one recurring charge on each, so the issuer doesn’t close them. One of those recurring charges is my $0.99 cent monthly Apple storage fee. That’s it.

Of my other two cards, I use one — my Capital One Venture card — for almost everything, earning general travel rewards as I go. My fourth credit card is new; it’s an airline-branded card that I got recently because of my frequent trips to visit my daughter and new grandbaby (absolutely a joy of getting older!) in another city. So, I’ve got four credit cards that I pay off in full every month, and my credit score, like Dayana’s, is in the 800s.

So, the question to answer is: What’s your goal? If you’re looking to build your credit, you don’t need a lot of cards to do it. From one to four credit cards is plenty.

Benefits of opening another credit card

Here are the benefits of having more than one card:

• You’ll increase your 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.


• You can play the rewards card game, using the best rewards card for a particular purchase. Now, I’m not a rewards card player — I like my two rewards cards, and that’s enough for me. If you’re trying to figure out the best rewards card for your situation, use 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.

Downsides of opening another credit card

• 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 that 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 your payments. 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. One card is with my regular bank, and my three other cards are with two other banks. Every time I check the app of my regular bank, I check the other two banks 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. (Be sure to look at the charges on your card, too, since this is the first place you may see potential fraudulent activity show up.) Just be sure that, if possible given your financial situation, you regularly pay off the complete outstanding balance before the due date.