How many credit cards is too many?

When you begin exploring credit cards, you’ll quickly notice the best credit cards come with widely varying offers. From travel rewards to cash back and 0 percent introductory annual percentage rates (APRs), it can be challenging to narrow your choices.

The number of credit cards you should have varies by your unique financial needs and preferences. In some cases, carrying several credit cards in your wallet every day makes sense. In others, you’re probably better off with a single primary credit card that meets all your needs.

Here’s what you need to know about having multiple credit cards and tips for pairing them to maximize your rewards most effectively.

Is there such a thing as too many credit cards or too few?

If you’re wondering, “Do I have too many credit cards?” know that there is no strict universal limit on the number of credit cards that is considered to be “too many” or “too few.” Your credit score won’t tank once you hit a certain number. For most people, having too many credit cards likely means you’re losing money on annual fees or having trouble keeping up with bills — and that varies from person to person.

If you are well organized, you may be able to handle 10 or more credit cards and keep track of their benefits, fees and payments without any problem. If you’re a frequent traveler and want to maximize travel credit cards like it’s your part-time job, then having an array of credit cards with different perks could even be incredibly lucrative. Some power users may have 20, 30 or more cards in their household.

Ryan Flanigan, a credit cards expert and writer at Bankrate who has enough credit cards to fill a binder, fits this category. When it comes to how many cards he thinks is too many, he says:

But not everyone is willing to put in the time or energy to become a power user, and it’s easy to become overwhelmed with different credit card earning rates, rewards programs, fees and payment due dates. Ted Rossman, a senior industry analyst at Bankrate, says he felt this way when he was juggling six personal credit cards and a business card. About his decision to simplify his credit card lineup, he says:

It’s fine to keep things simple with just a few cards. However, having a thin credit file can make it difficult for lenders to determine what kind of borrower you are. Lenders typically view this as a risk. Plus, your credit behavior can have a larger effect on your score when you only have a few accounts. Think of it this way: It’s much easier to use up most of your overall credit limit when you have just a few cards, and doing so can harm your credit score because it means that your credit utilization will be high.

How many credit cards should you have?

Your ideal number of credit cards is something you’ll have to determine on your own. For reference, the average American is reported to have between three and four credit cards. Where you fall compared to that baseline should depend on the following factors:

• Your ability to manage payment due dates and pay off your credit card balances monthly
• How comfortable you are paying credit card annual fees (and if you’re getting significant value in return)
• The number of cards you can reasonably use regularly for purchases
• The perks you can get with each one (without paying for redundant benefits)
• The type of rewards you want to earn and whether you want to earn more than one type of rewards currency

Are you a minimalist, a moderate or a rewards aficionado?

Our card user breakdown might help you categorize your spending habits and decide how many cards you need to reach your financial goals:

The minimalist: 1-2 credit cards

One or two well-chosen credit cards should be a good fit for those who like to keep it simple. If you only have one credit card or want a starter card, we recommend choosing a no-annual-fee flat-rate cash back card. You’ll earn a little cash back on every purchase and won’t need to keep track of bonus categories or annual fees.

If you feel like you’ve gotten the hang of that, you might consider adding another card to your wallet. With a new card, you can increase your available credit, earn more rewards and maybe even score a nice sign-up bonus. If you already have a good flat-rate card, we suggest a card with bonus categories that match your spending habits — whether that’s travel, groceries, dining out or something else.

The moderate: 3-5 credit cards

Most people fall within this category. At this point, you can probably earn rewards in all of your major spending categories. Ideally, you’d have an excellent flat-rate card (rewarding at least 2 percent cash back or 1.5 points or miles on all purchases) and two to four other types of cards that reward your most frequent purchases.

The rewards aficionado: 6+ credit cards

At this point, earning credit card rewards often becomes something like a hobby — a lucrative one for many. Some people’s credit card portfolios are well into the double digits. 

But you probably won’t be able to handle multiple credit cards unless you get organized. As soon as card details become difficult to keep straight in your head, create a spreadsheet or find an app to help track annual fees and payment due dates (if autopay isn’t an option). You might also note bonus categories, sign-up bonus deadlines and any other perks. After all, many premium credit cards are only worth their annual fees if you actually use the benefits.

If you’re looking for your first card (or looking to add another to your wallet), use Bankrate’s spender type tool to determine which cards might match best with your spending habits and lifestyle.

Does the number of credit cards you have impact your credit score?

All credit accounts impact your credit score, including credit cards. While the number of credit cards isn’t a specific credit score factor, getting a new card will impact your score in both the short and long term.

How it can hurt your credit score

Applying for new credit cards can hurt your credit score in the following ways:

• New cards cause hard inquiries: When you apply for a credit card, a hard inquiry is placed on your credit report, and you may see a temporary drop in your credit score. However, that should typically last for only around six months to a year, assuming you keep your balances low and pay on time. Hard inquiries remain on your credit report for two years.
• You could have too many applications in a short time: “New credit” makes up 10 percent of your FICO credit score, meaning that several new accounts and recent inquiries will cause your score to decrease. For the best approval odds and credit score, you should wait 3 to 6 months between credit card applications.

How it can help your credit score

Getting new credit cards can also help your score. Here’s how:

• You can lower your credit utilization: The amount of debt you owe in relation to your credit limits is known as credit utilization, and it’s the second most important factor for your credit score (behind payment history). Lower is better for this number, and opening a new credit card can help. Here’s why: Let’s say you currently have two credit cards and their combined credit limit is $10,000. If you typically spend $1,000 between the two credit cards monthly, your credit utilization is 10 percent (1,000 / 10,000 = 0.10). If you get a new card with a $2,000 limit and continue spending the same amount between the three cards, your ratio drops to about 8 percent (1,000 / 12,000 = 0.083).
• You can avoid a thin credit file: If credit scoring models have more input about your credit usage from multiple cards, they can better assess your creditworthiness.
• The length of your credit history will improve over time: This is another factor that goes into your credit score. It includes the average age of your credit accounts, as well as the age of your oldest account. Having more than one credit card can improve the length of your credit history over time.

For Flanigan, accumulating credit cards has definitely helped his credit score over the years. “My credit score is the highest it’s ever been,” he says. “The initial hit goes away quickly.”

However, these positive effects can only happen if you use your credit cards responsibly, are careful about the timing of your applications and have good credit-building habits. “I’ve never missed a payment in my life,” says Flanigan, “and just because I have a ton of cards doesn’t mean I’ll carry debt unless it’s with an intro APR offer.”

When having multiple credit cards makes sense

There are many situations where you can benefit from more than one credit card, especially for rewards enthusiasts willing to get multiple credit cards from the same card issuer.

Instances where it can make sense to have multiple credit cards include the following:

Disadvantages to consider about having multiple cards

All these reasons aside, it’s important to note that multiple credit cards only make sense for people whose finances are already organized and who pay their credit card balances in full each month. If you carry a balance and pay interest, those costs often outweigh the value of rewards and benefits. Also, if you apply for a number of credit cards within a brief period of time, it could negatively impact your credit score, as mentioned earlier.

When having one credit card makes sense

If you find yourself stressed at the thought of carrying more than one credit card, you’re certainly not alone. After all, many consumers prefer the simplicity of having one credit card and one bill to deal with — especially when one card meets a variety of needs and additional cards would just make life more complicated than it needs to be.

Here are some situations where you might want just one credit card:

For those that fall into the above categories, Flanigan offers this advice: “If you just want one card, make sure it gives you a solid base rate and has bonus categories. A sign-up bonus or intro APR offer wouldn’t hurt either.” Choosing a card with one of the best sign-up bonuses on the market, plus rewards that match your spending habits, will allow you to get the most out of your credit card while still keeping your finances simplified.

Disadvantages to keep in mind when you have just one card

Having a single credit card means your total line of credit will be lower than with multiple cards, which could increase your credit utilization ratio. Additionally, you won’t be able to tap into multiple rewards programs offered by different cards. You will also have a thinner credit file, and you might find yourself in a bad position if your card is lost, stolen or subject to fraud.

However, if one card meets your needs and you feel comfortable with your credit score, then you shouldn’t feel like you need to get another card if you don’t want one.

The bottom line

Only you can decide how many credit cards is too many, too few or just the right amount. That may mean experimenting a bit to find the ideal number and combination for your needs.

Start with one or two credit cards, and don’t be afraid to branch out. Make sure you’re ready to put on the brakes, however, when you feel you’ve hit your max. At the end of the day, the right number of cards allows you to maximize rewards and perks without overcomplicating your finances.