Financial Literacy

From Investopedia: How Many Credit Cards Should You Have?

BY Spectrum Wealth Management | Sep 9, 2022
By Amy Fontinelle
August 3, 2022

Should you have more than one credit card? If you’ve ever spent your way into a massive pile of credit card debt, you probably know the answer: No!


  • The average American now holds 3.84 credit cards. That figure is down 4% from 2019, and it follows a pattern of U.S. consumers shedding credit card debt as the coronavirus pandemic spread financial uncertainty.
  • Having more than one credit card may help you keep your credit line utilization ratio per card lower than the recommended 30% by spreading charges.
  • There are potential benefits to having multiple cards, such as pairing various types of rewards cards to optimize earnings on all categories of spending.

It’s certainly true that taking out multiple credit cards can make your debt repayments unsustainable. However, there is no simple answer as to how many credit cards you should have, and there can even be advantages to having more than one credit card. Most experts agree that having multiple credit cards can either help or hinder your credit score, depending on how well you manage them.

This hasn’t stopped Americans from taking advantage of the credit cards offered to them. A recent Experian report shows that the average American now holds around 4 credit cards. That figure is down slightly from previous years, and it follows a pattern of U.S. consumers shedding credit card debt as the coronavirus pandemic spread financial uncertainty.1

Is It Good to Have Multiple Credit Cards?

The effect on your credit score is probably one of your major concerns about having multiple credit cards. That is a common consideration, but having more than one credit card can actually help your credit score by making it easier to keep your credit utilization ratio low.

For example, if you have one credit card with a $2,000 credit limit and you charge an average of $1,800 a month to your card, then your credit utilization ratio—the amount of your available credit that you use—is 90%. Where credit scores are concerned, a high credit utilization ratio will impair your credit score. It may not seem fair—if you have just one card and pay it off in full and on time every month, then why should you be penalized for using most of your credit limit? But that’s how the credit scoring system works.

Is It Bad to Have Multiple Credit Cards?

No, if you handle your credit wisely, keep your credit line utilization ratio below 30%, and keep track of payment due dates.

To improve your credit score, most credit experts recommend that you should avoid using more than 30% of your available credit per card at any given time.2 By spreading your $1,800 in purchases across several cards, it becomes much easier to keep your credit utilization ratio low.

This ratio is just one of the factors that the FICO credit scoring model takes into account in the “amounts owed” component of your score, but this component makes up 30% of your credit score. Only your payment history is weighted more heavily (at 35%) in determining your credit score.

Warning: FICO cautions that opening accounts that you don’t need just to increase your total available credit can backfire and lower your score.3

How Many Credit Cards Should You Have?

There is no magic number to that question because everyone’s situation is different. A strong argument can be made for having at least one credit card to take advantage of the inherent convenience, security, and other benefits. Justifying having more than one credit card can depend on whether you need the extra credit lines to accommodate your monthly discretionary budget or seek to leverage your everyday spending to earn various types of rewards like cash back, points, or airline miles.

The Downsides of Too Many Credit Cards

Even having two credit cards can be one too many if you can’t afford to pay your bills, don’t need them, or don’t plan to use them for some purpose.

While getting a new credit card can sometimes improve your credit score by potentially lowering your total credit line utilization ratio, getting a lot of cards in a short period of time is not advised. Many card issuers even have rules in place to combat this phenomenon, which has arisen with customers who try to game the system by signing up for lots of credit cards to earn bonuses and then cancel after meeting the spending requirements. For example, Chase has a policy termed 5/24, which doesn’t allow you to be approved if you have applied for more than five credit cards (regardless of the issuer) in the past 24 months.4

Having multiple cards can mean multiple fees and interest charges that accumulate in several places. Premium cards often come with annual membership fees and other cards may have teaser introductory rates that shoot up after several months. Keeping track of all of this, even with relatively small balances, can become complicated.

The Impact on Your Credit Score

Another potential downside of having a large number of cards is that it can make you look risky to lenders and lower your credit score. Even if you have them all paid off, the mere fact that you have a lot of open and available credit lines can make you look like a potential liability to the next lender.

So, while there is no absolute number that is considered too many, it’s best to only apply for and carry the cards that you need and can justify using based on your credit score, ability to pay balances, and rewards aspirations.

Tips on Managing Multiple Cards

Having an array of credit cards can allow you to earn the maximum available rewards on every purchase that you make with a credit card.

For example, you might have a Discover it Cash Back card to take advantage of its rotating 5% cash-back categories so that in certain months, you can earn 5% back on purchases such as groceries, hotels, restaurants, and gas (subject to a cap of $1,500 in combined spending per quarter). You might have another card that always gives you 2% back on gas. Use this card during the nine months of the year when Discover isn’t paying 5% cash back on gas.5

Additionally, you might have a card that offers a flat 1% back on all purchases. This card is your primary card for any purchase where a higher reward isn’t available. For example, you might be able to earn 5% on all clothing purchases in October, November, and December with your Discover card; the rest of the year, when no special bonus is available, you would use the 1% cash-back card.

Another consideration is store-branded credit cards that can only be used for purchases in that particular store or on their website. Opening a new store credit card that offers a significant discount on those purchases can be a huge benefit if you’re doing a lot of shopping in one place; for example, back-to-school shopping, holiday shopping, or a major purchase like appliances for your home. Getting such a card and paying it off right away can be advantageous to get the discount, but it may also be a good idea to close the store card afterward if it is no longer needed.

Of course, you don’t want to go overboard—if you have too many accounts, it’s easy to forget a bill payment or even lose a card. The problems that can result from such oversight will quickly ruin any savings that you might have earned.

Compromised Cards

Sometimes a credit card company will freeze or cancel your card out of the blue if they detect potentially fraudulent activity or suspect that your account number might have been compromised.

In a best-case scenario, you won’t be able to use your card until you talk to the credit card company and confirm that you are, indeed, on vacation in Bermuda and your card has not been stolen. That’s not a phone call that you can make from the cash register, however, because you’ll have to provide sensitive personal information to confirm your identity. You’ll need another way to pay if you want to complete your purchase.

In a worst-case scenario, the company will issue you a new account number, and you’ll be without that card for a few days until you receive your new card in the mail. Another possibility is that you could lose a card or have one stolen. To prepare, you might want to have at least three cards: two that you carry with you and one that you store in a safe place at home. This way, you should always have at least one card that you can use.

Because of possibilities like these, it’s a good idea to have at least two or three credit cards. If you only want to have a single credit card, make sure that you’re always prepared with a backup payment method, whether cash or a debit card. These cards offer convenience and security, but are they worth it? Check the fees, if any, and be especially careful about prepaid debit cards.

Should You Carry a Credit Card for Emergencies?

It would be best if you didn’t have to use a credit card for an emergency—and instead had enough money in a liquid account, such as a savings account, to use in such a situation. However, if you are away from home while on vacation and don’t have the ready cash to cover a car repair or some other unexpected expense, then a credit card can definitely come to the rescue.

Other situations, such as an unexpected medical bill or a job loss, can often drain any emergency savings. Having at least two or three credit cards can be a useful thing in times of crisis.

Ideally, these cards should have no annual fee, a relatively high credit limit, and a low interest rate. However, if you turn to credit cards when you’ve lost income, exercise extreme caution so that you don’t take on unmanageable amounts of credit card debt.

How Many Credit Cards Do Most People Have?

A review of national credit report data shows Americans held an average of around 4 credit cards in 2020.6

How Often Should You Apply for a Credit Card?

In theory, you can apply for new credit cards as often as you like. Since the average online application only takes a few minutes, you can apply for a lot of cards in a very short amount of time.

But that doesn’t mean you should apply for multiple credit cards all at once. In most cases, waiting between credit card applications is better for your credit score—and it can even improve your chances of getting accepted.

Does Having More Credit Cards Help or Hurt Your Credit Score?

Having multiple credit cards can help—but can also hurt—your credit score. It all depends on how well you manage the cards that you have.

No matter how many credit cards you have, the same rules apply: Keep your balances low, and always pay bills on time. While the number of cards that you carry likely won’t affect your score in itself, you should avoid applying for several new credit cards at one time. Over time, if managed properly, more cards—and thus a higher credit limit—can help you improve credit scores.

Can You Have Two of the Same Credit Card?

Many credit card issuers will indeed approve you for another one of their credit cards as long as you meet the qualification criteria. And, if you’ve always managed your current credit card well, that may make it easier for you to get approved for the new credit card.

However, don’t assume that you’ll get approved for the exact same terms as your current credit card. The credit card issuer will approve your application based on your current income and credit standing, which may have changed since you applied for the first card.

The Bottom Line

There are many benefits to having multiple credit cards, but only if you manage them responsibly. To ensure that having several credit card accounts will work for you, not against you, be aware of the benefits that each card offers, your credit limit on each account, and especially your payment due dates.

This article was written by Amy Fontinelle and published on on August 3, 2022.

  2. Image courtesy of iStock

Spectrum Wealth Management, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Additional information about Spectrum’s investment advisory services is found in Form ADV Part 2, which is available upon request. The information presented is for educational and illustrative purposes only and does not constitute tax, legal, or investment advice. Tax and legal counsel should be engaged before taking any action. The opinions expressed and material provided are for general information and should not be considered a solicitation for purchasing or selling any security.