How Many Credit Cards Is Too Many?

Updated on April 9, 2024

Credit cards are quite useful to have – and because of their benefits, people decide to get multiple of them. Sure, you might think to get one single card with a bigger credit line, but that might end up being even more expensive. Plus, there are some benefits to holding multiple credit cards and you can’t ignore them. This is why the average American holds about 3 credit cards, according to an Experian report.

With that in mind, is there such a thing as too many credit cards? How many credit cards is too many? Can too many credit cards affect you in any way? This article will teach you everything there is about becoming the owner of multiple credit cards.

Can You Have Too Many Credit Cards?

In many cases, having multiple credit cards can prove to be beneficial for you. However, there is also such a thing as “too many credit cards.” This depends entirely on the person having a hold of them and the way they use them.

For example, a person may not have any problems having multiple credit cards, as their financial situation allows it. If they have the funds to cover the debt, they might not feel the negative sides of having too many credit cards. However, a person that is financially struggling might feel that even two or three credit cards are difficult to handle. In most cases, if you are experiencing difficulties with your credit cards, then you probably have too many of them.

Risks of Having Too Many Credit Cards

Having one too many credit cards can put you at a bit of risk – some of them being less obvious than others. Technically speaking, their presence does not affect your credit score much – and as long as the credit card is used responsibly, even your credit score should recover quickly.

With that in mind, there are also certain risks that you need to be aware of. For one, when you get a new credit card, your credit score will take a small hit. Some people do not even notice this, because, with proper credit utilization, your credit score should be back to normal in one month – three at most. However, if you don’t utilize your credit properly, then you might cause some long-term damage to your credit score.

And this can certainly happen. After all, when you get a credit card, you’ll likely want to use it. You’ll buy more stuff and take on more debt. Your spending will ramp up without you noticing, and before you know it, you may be drowning in too much credit debt.

Having too many credit cards (particularly new ones) can also lower the average age of your account. Needless to say, this can have quite a negative effect on your credit score. Plus, credit cards can come with a few fees that can hurt your budget when put together.

Benefits of Having Multiple Credit Cards

While there are indeed risks to having too many credit cards, there are also a few benefits. For one, each card will have its own reward program. Some may have cashback rewards, whereas others are just perfect for traveling. By having multiple cards, you can enjoy all of those perks.

The second obvious benefit is that it gives you a bigger line of credit. If you have the means of making back the payments, then this can be quite helpful. Plus, the more steady credit you use, the more your credit utilization ratio should improve. The fact that you are borrowing and making proper payments will help improve your credit score.

One more perk is that it allows you to organize your expenses and keep them separate. For example, one credit card may be used to handle home expenses such as utility bills, TV subscriptions, and so on. Another may be for travel expenses, entertainment, and so on. More credit cards can help you keep things nice and tidy.

Signs You Might Have Too Many Credit Cards

When you have too many credit cards, you will probably know. This is because your credit will suddenly start taking hits, and you will have problems with your credit utilization ratio as well. Overall, here are the signs that you may have too many credit cards.

Too Many Accounts to Track

When you have too many credit cards, it can get difficult to keep track of your balances. You find it hard to keep up with due dates, you forget to make payments, you forget how much money you owe to which account, and so on. Some people are better at organizing their finances, and can easily handle 6 credit cards or more – whereas others find it difficult to just organize two cards.

Each person has his own limit, and there is no shame in that. You just need to know what your limit is. If you feel like you have trouble keeping tabs on your credit cards, then you might want to consider canceling a few of them to a more “comfortable” number. A balance transfer might help you keep things more organized.

More Debt Than You Can Manage

Let’s face it; when you have too many credit cards, you feel tempted to use them, don’t you? The more you use them, and the more you fail to pay back the debt, the faster you will fall into the dark pits of credit card debt. Good debt is good to have, as it makes you reliable; however, bad debt that is left unpaid for too long can affect your credibility.

Credit Card Applications Are Hurting Your Credit Score

Whenever you apply for a new credit card, a hard inquiry will be placed on your credit card. This will take a few points off your credit card. In normal circumstances, this should “heal” in a short time. However, when you open too many credit accounts, you add multiple inquiries – and together, they can deal greater damage to your credit score.  

Be Careful About Closing Too Many Credit Cards Too Fast

One thing that you may want to be careful about is closing too many credit cards at a quick rate. Indeed, if you have too many credit cards that just end up affecting your credit score, then closing your credit card would be the right way to go. However, you still need to be smart about it.

Whenever you close an account, it slightly affects your credit score. In most circumstances, the damage is minor – and in 3 months at most, your credit score should be back to normal. However, when you close multiple accounts too fast, you’ll be creating a bigger bulk of small damage. This will be a lot more difficult to fix.

For this reason, you should wait three to six months between credit cards before you close them. Keep them open and use them for minor payments until you close them – like a Netflix subscription, for example. This will help improve your credit utilization ratio until you can safely close that account.

The Bottom Line

The number of credit cards that someone should have depends on each person. For example, some may feel that two is more than enough, but others feel perfectly fine with 6 cards. It all depends on your debt management abilities.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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