The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
Credit cards are a staple of Americans’ wallets. The average adult has at least two bank-issued accounts, according to Experian’s 2016 State of Credit report. Consumer credit plays a key role in financial health, and, when used wisely, can strengthen your stance in the credit score range and help you secure loans with the best interest rates.
On the other hand, bad credit often leads to higher interest rates and could even disqualify you from the lending process. (Not sure where your finances stand? You can view two of your credit scores for free on Credit.com, which will not hurt them in any way.)
So how many credit cards are too many? And will having several accounts affect your credit? The answer to these questions often comes down to personal habits and goals, and there are several pros and cons to consider.
If you’re an experienced and responsible credit user, the benefits of maintaining more than one card could outweigh the risks.
Earning Maximum Rewards
Credit card issuers offer a variety of perks for cardholders. Using multiple cards allows you to strategize and earn for every dollar you spend. For example, suppose you are a frequent flyer who is also interested in funding your child’s education. Card A is tailored to suit travel-related rewards, while Card B’s sole focus is college savings. You can take advantage of multiple benefits by considering your most frequent expenditures and choosing credit cards that align with your goals.
Safety When One Card Is Compromised
Credit card issuers are cracking down on identity theft, but chip technology still isn’t perfect. If your credit information is compromised, your issuer will probably send you a new card and instruct you to shred the old one. If this occurs, it’s useful to have a second option for emergencies.
While there are potential benefits of maintaining multiple credit cards, there are a few drawbacks worth considering.
Losing Track of Spending
The case for fewer credit cards often comes down to simple math: Fewer credit cards means fewer chances to overspend. If you struggle with budgeting, it can be difficult to curb spending with a high credit limit. You also run the risk of digging yourself into a hole of debt that’s difficult to escape.
Forgetting to Pay a Bill
If your life is chaotic or your memory is lacking, the last thing you need is multiple account balances to keep track of. While it’s possible to create reminders for yourself with budgeting apps, the potential credit damage caused by late payments, fees and accruing interest may not be worth the trouble.
While there is no ideal number of credit cards to keep in your wallet, learning how your credit score is calculated can help you use them wisely. Bolster your score by creating deliberate spending habits and credit usage along the way.
Image: PeopleImages
April 9, 2024
Credit Cards
October 21, 2020
Credit Cards
August 3, 2020
Credit Cards