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.
With so many tempting credit card offers out there, who wouldn’t want to take advantage of them and sign up? But some consumers may have reason to wonder if filling out all of those credit card applications may add up to something more concerning: a bad credit score. Is there ever such a thing as too many cards?
To find out, we turned to Rod Griffin, director of education for Experian, one of the three major credit reporting agencies. Here’s what he told us.
“It’s not the number of credit cards you have, it’s how you use the cards that you have,” he said via email. “You only need one or two credit cards to have good credit scores. Just what constitutes ‘too many’ depends on the person and their unique credit history.”
It’s important to know that credit scores today put a big emphasis on utilization, or how much credit you use weighed against how much is actually made available to you. This accounts for 30 to 35% of a consumer’s credit score, Griffin said, so “the number of credit cards you carry is less important than the balances you carry on the cards in your wallet.” (You can see where your own credit stands by viewing your free credit report summary, updated every 30 days, for free on Credit.com.)
With these factors in mind, it’s probably not a good idea to apply for a lot of credit cards all at once since multiple inquiries can raise a red flag to lenders, Griffin said. “The underlying questions a lender may have are, ‘Why is the person suddenly applying for a lot of potential new debt? Are they going to charge more than they can afford and not be able to repay the debt?’ ”
Yet the risk associated with applying for multiple cards does vary by your credit standing. If your credit history is already in poor shape, “applying for just two or three cards in a short time might be ‘too many,’ ” Griffin warned. Conversely, a person with a good credit history may not feel much of a burn from submitting two or three credit card applications.
Whether you’re using an old credit card or a shiny new one, you’ll want to do your best to use it smartly. That means working to pay your balances off on time, and in full, every month, to help you maintain a low utilization rate, Griffin said. Likewise, avoid carrying a balance near the credit limit on even one card as this can “seriously impact credit scores,” he added. “If you have 10 credit cards, use them to make small purchases, and then pay the balances in full each month. You will have a low utilization rate, which will benefit scores.”
He added, “the right question isn’t really about how many cards is ‘too many.’ The right question is, ‘How do you use the cards you have available to you?'”
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
Image: AndreyPopov
April 9, 2024
Credit Cards
October 21, 2020
Credit Cards
August 3, 2020
Credit Cards