How many credit cards should I have? - Building Credit History FAQ

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How many credit cards should I have?

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There is no magical number of credit cards that is considered right for all consumers. In fact, the number of credit cards you can have depends on your individual credit history, credit score, and the way you manage your credit accounts. Lenders also have their own view on how many credit cards is “too many.”

The number of credit cards you have does not greatly affect your credit score. Generally speaking, your credit score won’t go down just because you have several credit cards. What important is opening and closing a bunch of cards at once. The way you pay your credit card bills and the way you are utilizing your credit cards also have great influence on your credit score. When you close or open multiple accounts you change overall available credit and your debt to credit ratio. And if your debt to credit ratio goes up, your credit score goes down. The overall age of your credit history may change as well when you open and close credit accounts, however the impact won’t be significant.

How many credit cards should I have for good credit?

There is nothing bad in having different credit cards to get more benefits. You can have a miles rewards credit card, cash back credit card, and a low interest credit card all at once and still have good credit. However, there are signs indicating you have too many credit cards. One of such signs is you cannot manage your accounts responsibly any more. When you start making late payments or miss them, that is a ding. Missed or late payments can lower your credit score, so it is better think whether closing one or two cards will help the situation. If you constantly struggle to make minimum payments with all lenders, that is another indication that it may be time to consider closing some of your credit cards.

Having several credit card cards may cause overspending which may incur too much debt. While it can be easy to spread your spendings between several credit cards, it is important to keep an eye on the percentage of debt you carry on each credit card. Spending only up to 30% of available credit on each credit card and overall is recommended. Having more debt may lower your credit score.

If you are struggling with credit card debt, reduce the number of credit cards to just one. If it is still difficult to manage, take a break from credit card use. This will allow you to regain control of your finances. Then try not to have more credit cards than you can comfortably manage.

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