Should you apply for multiple credit cards?

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Published on April 25, 2023 | 5 min read

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Key takeaways

Owning multiple credit cards can be good for your credit utilization ratio and help you earn rewards on a variety of spending
The key, though, is to apply strategically and wait a few months in between applications
Before you decide to stock up your wallet, ensure you're in a financial situation stable enough to keep on top of your payments and any annual fees

There are so many ways to get a new credit card these days. You might be offered one the next time you go to your favorite retail shop, and you’ve also probably receive preapproved offers in the mail.

Having more than one credit card can have a lot of benefits, including boosting your credit score, as long as you time your applications well and maintain your credit cards responsibly.

Is it bad to apply for multiple credit cards?

Applying for multiple credit cards is not a bad thing, but it’s important to have a strategic approach. For starters, you want to make sure that the new card you’re applying for is adding something to your financial portfolio that you don’t already have. Take a look at the credit cards you already have to see how you’re using them. Are your current cards helping you meet your financial goals? If not, then it makes sense to go forward with an application for new credit.

Whenever you apply for a new credit card, the card issuer will do a hard inquiry on your credit report to check your creditworthiness. This inquiry can lower your credit score, though the effect only lasts for a short while. However, applying for multiple cards in a short period of time will trigger multiple inquiries and can be a red flag to card issuers. In fact, Chase has a rule called the 5/24 rule, which states that if you’ve opened five credit cards with any issuer in the last 24 months, you won’t be approved to open a credit card account with Chase.

If you plan to apply for multiple credit cards, it’s best to spread your applications out over a period of time. Try to keep your applications about three to six months apart. This will give your credit score time to bounce back from hard inquiries and give you time to see if you actually need another new card.

How does applying for multiple credit cards hurt your credit score?

Applying for multiple cards will affect your credit score because of the hard inquiries that will be triggered on your credit report. However, the effect on your credit score doesn’t stop there. Your credit score is broken down into five key factors (payment history, credit utilization, credit history, credit mix and new credit). The factors that have the largest impact on your credit score are payment history (35 percent) and credit utilization (30 percent). Both of these factors come into play after you have been approved for your credit cards but should be considered before moving forward with an application.

Payment history has to do with the payments you make on your accounts. When you pay even the minimum payment each month on your accounts, you are maintaining a good payment history. However, the likelihood of missing a payment can increase when you have multiple cards to manage. When you miss a payment, your credit score takes a hit. And a missed payment can stay on your credit report for seven years, making it harder for you to get new credit in the future.

Credit utilization has to do with how much credit you have on all your accounts versus how much credit you use. When you have multiple credit cards, you will increase your available credit, which has the potential to improve your credit score. However, this is only the case if you keep your credit utilization low. It is recommended that you keep your credit utilization between 10 and 30 percent across all accounts for a healthy credit score. So, if you have a total of $10,000 of available credit, ideally you would only use $1,000 to $3,000 at any given time. If your credit utilization goes over that amount, your credit score could drop. To gauge whether your card balances are dampening your credit score, check out Bankrate’s credit utilization ratio calculator and establish the next steps toward improving your financial opportunities.

Is it good to have multiple cards?

Having multiple credit cards can be very helpful. The key to being successful with multiple cards is making sure you budget for your purchases so you can keep up with your payments and keep your credit utilization in a healthy range. If you are able to use your multiple cards responsibly, you will see some very tangible benefits.

Benefits of having multiple cards

When you have multiple cards, one of the clear benefits is that you have access to more available credit. This will give you the ability to make more purchases, or larger purchases, without having to worry about going over your credit limit or hurting your credit utilization. Another benefit of having multiple credit cards is the possibility of earning a greater variety of rewards. You could expand your cards to include cash back on grocery purchases or points on travel bookings, for example. Lastly, you are adding to your credit mix, which makes up 10 percent of your credit score. This is especially helpful if you’re just starting to build up your credit and don’t have any other credit on your report, such as a loan or mortgage.

Risks of having too many credit cards

Having multiple credit cards can bring benefits, but it also comes with some risks. When you have multiple cards, monthly payments could become unmanageable. If you have cards that also have fees, the possibility of being overwhelmed increases. It is incredibly important to have a repayment strategy for your credit cards that is a part of your normal budget in order to avoid payment pitfalls.

Another risk is that you may not be getting the most out of the cards you have. Not using a credit card isn’t bad, but it’s important to benefit from the cards you own. There’s no point paying an annual fee or having to keep track of another card payment when you’re not making the most of the rewards structure or travel perks that come with the card. And if you decide to cancel a card that you aren’t using, it can affect your credit history (which makes up 15 percent of your credit score calculation).

How to apply for more credit cards

When applying for multiple credit cards, the first rule of thumb is to look at what you have to see what you might need to add. If you’re simply looking for more credit, check with your issuer to see if they can increase your credit limit first. However, if a new card with different benefits is what you want, it’s time to do some research. Explore the best credit cards on the market and do some comparison shopping. Narrow down which cards you think will add the most benefits and check the criteria for approval. Then, check your credit report to make sure you meet the criteria before going forward with an application.

Once you’ve done this legwork, you’re ready to apply. If you’re looking to add multiple cards, remember to space out your applications. Don’t try to apply for multiple cards in one day. Instead, give yourself a minimum of three months between each application for a new card — and be sure to factor each new card payment into your budget so that you can keep on top of them.