Are you eyeing a new credit card in 2022 but are concerned you might already have too much plastic in your wallet?
We often get questions about how many credit cards are too many for one person to have.
It’s a good, financially responsible question to ask. But you may be surprised by the answer.
In this article, we’ll get the advice of money expert Clark Howard and credit card expert Jason Steele to help you understand how the number of credit cards you have affects your credit score and financial life.
Clark Howard Fields the Question: How Many Credit Cards Is Too Many?
On a recent episode of The Clark Howard Podcast, listener Matt from Ohio said he was interested in adding the Target RedCard to his wallet. But he had concerns since he already has a Citi Double Cash, Costco Anywhere Visa, Amazon Prime Rewards Visa and another co-branded store credit card.
He asked Clark: “How many credit cards is too many?”
Clark’s response could be applicable to Matt’s dilemma and your personal financial situation.
“There’s no such a thing as ‘too many’ cards unless and until you’re applying for a mortgage,” Clark says. “That’s the one kind of underwriter who freaks out about the number of cards you have even if your credit score is great.”
Clark points to credit card experts who sometimes carry as many as 40 or 50 open credit card accounts so that they can analyze the cards. As long as you have a strong credit score, the pure volume of cards is not a ding on your credit if you use the cards properly.
I also spoke with Jason Steele on this topic. He is the founder and producer ofCardCon, which is The Conference for Credit and Credit Card Media.
His message to prospective credit card applicants was similar to Clark’s:
“The right amount of credit cards to have is no more than you can manage responsibly,” Jason says. “For some, that’s zero, but for others that could be many. As far as your credit score is concerned, having five is ideal, but there’s no benefit to having more than that.”
You can listen to Clark’s full answer and explanation from the podcast here:
Clark Says Worry About This Instead
Instead of worrying about having too many credit cards in your life, Clark says it’s actually more important to make sure you don’t have too few.
“The big potential problem with credit cards is having too few,” Clark says. “There are lots of potential danger spots with that.”
We recently explored this topic with both Clark and Jason in a different article that you should read for more information, but here is a quick rundown on why “too few” is more of a concern than “too many”:
Your credit score is impacted by things like credit mix, credit utilization and payment history. Not having a credit card to properly jump through those hoops could adversely impact your score.
If you have just one credit card, you run the risk of an issuer deciding to reduce or eliminate your access to credit, which could really put you in a bind if you need the money. Also, losing that card will throw your credit utilization ratio out of whack. Card issuers can do this without warning or necessary justification, so it’s better to be safe than sorry.
To remedy this, Clark calls on a “Noah’s Ark system” to ensure that you have at least two credit cards from two separate issuers (e.g., Chase, Citi, Capital One, Discover, American Express).
Clark personally carries six credit cards in his wallet. He carries a combination of cards that give him a steady cash back reward on everyday purchases alongside cards from businesses he frequents including Costco and Southwest Airlines.
Final Thoughts
It’s important to “know yourself” when it comes to adding credit cards to your wallet.
Successfully managing at least two credit cards (from separate issuers) will protect your access to credit and ensure that you’re positively impacting your credit score with low utilization and on-time payments. After that, you should be intentional about adding other cards.
What cards provide a net benefit in your financial life? And does adding them to your wallet help or hurt your ability to make smart purchasing decisions that are paid on time?
There’s no set limit to how many credit cards you can have, but there may be a limit to how many you should carry.
How many credit cards do you carry? We’d love to hear more about your strategy in the Clark.com Community!
Advertisem*nt
More Clark.com Content You May Like:
How Many Credit Cards Should I Have?
Best Rewards Credit Cards: Top Picks for Right Now
Big Change Coming to One of Clark’s Favorite Credit Cards
There is no right number of credit cards to own, and owning multiple cards gives you access to different rewards programs that various cards offer. Owning five cards, for example, would give you a bigger total line of credit and lower your credit utilization ratio.
The answer differs from lender to lender, but most consider six total inquiries on a report at one time to be too many to gain approval for an additional credit card or loan. In this article, we will review: What a hard credit inquiry is.
So, while there is no absolute number that is considered too many, it's best to only apply for and carry the cards that you need and can justify using based on your credit score, ability to pay balances, and rewards aspirations.
Having too many cards with a zero balance will not improve your credit score. In fact, it can actually hurt it. Credit agencies look for diversity in accounts, such as a mix of revolving and installment loans, to assess risk.
Too many credit cards for most people could be six or more, given that the average American has a total of five credit cards. Everyone should have at least one credit card for credit-building purposes, even if they don't use it to make purchases, but the exact number of cards you should have differs by person.
There is no right number of credit cards to own, and owning multiple cards gives you access to different rewards programs that various cards offer. Owning five cards, for example, would give you a bigger total line of credit and lower your credit utilization ratio.
The easiest way is to file a dispute directly with the creditor. If the creditor cooperates, the inquiry may be removed after sending a single dispute letter.
In general, six or more hard inquiries are often seen as too many. Based on the data, this number corresponds to being eight times more likely than average to declare bankruptcy. This heightened credit risk can damage a person's credit options and lower one's credit score.
If warranted, file a dispute with the corresponding credit bureau. If you dispute errors in your credit reports, including unauthorized hard inquiries, the credit bureaus are required to investigate. They're also required to correct information that's found to be inaccurate.
Closing a credit card could lower your credit score. That's because it could lead to a higher credit utilization ratio, reduce the average age of your accounts and hurt your credit mix. Before closing a credit card, it's wise to consider these factors and the potential impact on your credit score.
The 5/24 rule is an unofficial policy that dictates that Chase won't approve you for its cards if you've opened five or more personal credit card accounts from any issuer in the last 24 months. Put simply, the number of cards you've opened in the previous two years will affect your approval odds with Chase.
Yes, $20,000 is a high credit card limit. Generally, a high credit card limit is considered to be $5,000 or more, and you will likely need good or excellent credit, along with a solid income, to get a limit of $20,000 or higher.
Canceling a credit card will cause a direct hit to your credit score, so more often than not, you'll want to keep the account open. Correctly managing an open, rarely-used account may require some extra attention, but the added effort will help your credit in the long run.
To avoid credit damage from high credit utilization, you want to keep it under 30%. The lower the rate, the better for your credit — so striving for 0% is always the best approach.
It's generally recommended that you have two to three credit card accounts at a time, in addition to other types of credit. Remember that your total available credit and your debt to credit ratio can impact your credit scores. If you have more than three credit cards, it may be hard to keep track of monthly payments.
While it is not inherently bad to carry multiple cards, cardholders need to know what their own limitations are and what they can handle. It can be difficult to manage payments for multiple credit cards at once.
How many credit cards does the average person have? According to the latest figures from Experian, the average American has 3.84 credit cards with an average credit limit of $30,365.
While Experian found that the average American has four cards, you may be better off with fewer or more — depending on how you use them. If you already have a few credit cards and are interested in opening another, you may wonder if there's an ideal number of cards to have.
Introduction: My name is Velia Krajcik, I am a handsome, clean, lucky, gleaming, magnificent, proud, glorious person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
“There’s no such a thing as ‘too many’ cards unless and until you’re applying for a mortgage,” Clark says. “That’s the one kind of underwriter who freaks out about the number of cards you have even if your credit score is great.”
