How Many Credit Cards Should I Have? (2024)

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How many and what type of credit cards should you have? The answer is not only different for each person, but also likely to evolve with your finances, spending, knowledge and the offers available to you.

Is It Good To Have Multiple Credit Cards?

Any benefit achieved with multiple credit cards ultimately depends on the cardholder and how they manage their finances. Some prefer to live without a credit card and avoid the temptation to spend money they don’t have. Some do well with only one card earning cash back, while others keep two cards serving different purposes—one for everyday expenses and one for special dining out or travel experiences.

Some people (*cough*our entire staff *cough*) make a hobby out of maximizing rewards—travel rewards in particular. The veteran experts on our team keep binders full of credit cards and spreadsheets managing annual fee and monthly payment due dates. There are many routes to take with credit card ownership, but it is ultimately each cardholder’s choice as to which and how many credit cards will suffice.

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How Many Credit Cards Should I Have?

The number of cards you should have depends entirely on your financial situation and spending history. The most important thing to ask is: Can I pay off the full balance on every card every month? Having several cards is a lot of responsibility and if you doubt your ability to pay each monthly balance it might be best to avoid collecting multiple cards for now. In the long run, it is always best to resist the temptation to keep spending.

Live Without a Credit Card

Before choosing to apply for any credit card, remember not owning one at all is a perfectly valid choice. Using only cash or a debit card associated with a checking account works well for the roughly 20% of American adults who don’t own any credit cards. Despite popular belief, yes, it is possible to survive and thrive without a credit card.

When sticking with cash the only money available to spend is money on-hand or money saved. For some, that’s an effective form of budget discipline. Adding a debit card to the mix offers convenience and allows online purchases without the temptation to overspend.

The main downside to living without a credit card is the increased difficulty of building a credit score. You’ll need a solid credit score to take out a mortgage or for other large purchases and it’s more challenging to get one without a credit card. There are other ways to build credit like a history of timely payments on student or car loans so building credit should never be the sole justification for taking on debt. Still, for those without other loans, a credit card paid in full each month is a convenient and relatively simple way to build a stable credit history for larger financial commitments (such as buying a home) down the road.

Another drawback to living without a credit card is that you’re passing up the potential to earn rewards on your spending. Some banks do offer debit cards that earn rewards for purchases, but these are few and far between. Debit cards and cash also don’t offer the same purchase and fraud protection credit card companies usually provide.

Get a Single Cash-Back Card

For those applying for a first credit card, we recommend finding a card with no annual fee that pays cash back rewards on every purchase. For instance, the Discover it® Cash Back card offers 5% cash back on everyday purchases at different places each quarter up to a quarterly maximum of $1,500 in spending when activated. Plus, earn unlimited 1% cash back on all other purchases – automatically. This provides a great opportunity to build comfort with how rewards and credit cards work. Even if the credit line is not much to start, it may be enough to cover regular major expenses.

Cardholders may also consider a card on the Visa or Mastercard network, which are accepted by more retailers, especially abroad, than Discover. Top picks include the Citi Double Cash® Card, Chase Freedom Flex℠*, Chase Freedom Unlimited® and Capital One Quicksilver Cash Rewards Credit Card.

Students applying for a first credit card who don’t have much income or credit history should considerstudent credit cardswhich are aimed at this specific profile.

Add Multiple No-Annual-Fee Cards Based on Where You Spend

When adding cards to your wallet, think about where you spend the most with your credit card and educate yourself on which cards offer extra rewards in these places. Keep your eye out for cards with no annual fees.

A smart starting point could be to find a credit card that rewards the most for grocery shopping. The Blue Cash Everyday® Card from American Express (Terms apply. See rates & fees.) offers 3% cash back at U.S. supermarkets, U.S. gas stations, and online retail purchases in the U.S. (on up to $6,000 in each category per year in purchases, then 1%), and 1% cash back on other purchases. Cash back is received in the form of Reward Dollars that can be easily redeemed for statement credits. Another option is to apply for a card with a primary bank offering a single-rate earning cash-back rewards card.

Canceling a credit card early on while building credit history could damage your credit score. Reducing credit lines may mean an increase in the credit utilization rate, which also can reduce your score.

Depending on your lifestyle, there may be other options for additional cards, alternative to those offering cash-back rewards. Consider a card that rewards the cardholder with miles redeemable for travel expenses. The Bank of America® Travel Rewards credit card and the Discover it® Miles card are examples of these types of cards. Both cards are single-rate earning cards that allow cardholders to redeem miles as credits to eligible travel expenses (i.e. 2,500 miles = $25 travel credit). Check to make sure any travel-based credit card also offers no foreign transaction fees.

Specific retailer credit cards may also be convenient. These types of credit cards offer benefits and rewards tied to a specific retailer. Need a new work wardrobe? You may want to look at a Macy’s-branded card. Nordstrom, Home Depot, Best Buy and Amazon also all offer co-branded or store credit cards with unique benefits. (Amazon has a number of cards that offer increased rewards on their brands.) The Target RedCard™ Credit Card* offers 5% off on purchases at Target in store or online purchases, free shipping for online orders and a $0 annual fee.

Pay Annual Fees for Cards With Better Rewards

Sometimes specific rewards may justify paying an annual credit card fee. Consider loyalty to specific brands beyond a specific retailer, since most retailer cards don’t require an annual fee.

The key brands here involve travel. If someone stays most often at Marriott hotel properties or flies primarily with American Airlines, a Marriott Bonvoy or an AAdvantage-branded credit card may be just the ticket. Most of these brand-loyal credit cards do charge an annual fee. Try to pick the credit card offering the most likely-to-be-used benefits in excess of the annual fee.

Consider these travel brand-specific credit cards: United℠ Explorer Card, The World of Hyatt Credit Card and Alaska Airlines Visa® credit card. All of these cards charge an annual fee, but each represents a specific brand loyalty for travelers. For example, The World of Hyatt Credit Card offers a free night’s stay annually at one of Hyatt’s lower-tiered hotels. That $95 annual fee beats room rates that could be well over $100.

When it comes to airlines, benefits vary when choosing an airline-specific card and considering which you’ll actually use is important. For example, Alaska Airlines offers convenient flights across the U.S. and it’s easier to achieve a preferred status on Alaska Airlines than with United Airlines, which often flies the same routes. Plus, the Alaska Airlines card offers an annual companion fare starting at $122 ($99 fare plus taxes and fees from $23) after you spend $6,000 or more on purchases within the prior anniversary year. Add in the $95 annual fee for the Alaska Airlines Visa® credit card and cardholders are basically getting an airline ticket of any value for a companion for a little over $200, assuming the card would be used to meet the minimum spend required to earn the annual companion fare anyway. In other words: The perks make the annual fee worthwhile, as long as they’re used.

There are some credit cards with annual fees offering enhanced rewards on grocery and gas spending. The Blue Cash Preferred® Card from American Express (Terms apply. See rates & fees) provides strong rewards in these categories: 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more) and 1% cash back on other eligible purchases. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.

These high earning rates come with a $0 intro annual fee for the first year, then $95 annual fee. Compare this to the lower earnings on the $0-annual-fee version of the card, the Blue Cash Everyday® Card from American Express.

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Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

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Pursue Big Rewards and Welcome Bonuses

Pursuing big rewards and welcome bonuses can sometimes pay off, but it’s a risky game not everyone plays wisely. Big rewards often accompany much higher annual fees and high credit limits can make it tempting to spend more than necessary.

A clear example of a big rewards credit card that could pay off for the right cardholder is the Chase Sapphire Reserve®. For its hefty $550 annual fee, cardholders get a $300 credit towards travel purchases paid for with the card each year, Priority Pass airport lounge access, primary car rental insurance when they pay for their rentals with their cards, premium trip insurance, Visa Infinite privileges and 50% more points value when redeeming points for travel in Chase Ultimate Rewards® portal.Another popular credit card for those playing in the high end is The Platinum Card® from American Express. Similar to the Chase Sapphire Reserve®, The Platinum Card® from American Express has a hefty annual fee of $695 (Terms Apply. See rates & fees) and hefty benefits, including a large welcome bonus.

Credit Card Benefits Vary

Strategizing the unique benefits that each card offers is a key aspect of playing the credit game. When getting ready to sign up for a first credit card, instead of grabbing the first offer advertised, do some research. For example, for student credit cards, read about the non-student version of that card that the cardholder can graduate to and compare it to other non-student options out there.

As cardholders start to build a portfolio, they should consider how each card’s benefits can improve their lives in different ways (and increase a credit score). The key for any cardholder is to identify their own spending habits and how they can provide an opportunity for greater rewards, a stronger credit line and a lower utilization rate for future loan potential.

How Many Credit Cards Is Too Many?

Don’t overextend by signing up for too many credit cards at once.

Some people happily acquire credit cards solely for welcome bonuses and then cancel the card—often before the annual fee charge arrives after one year. This is known as churning-and-burning. Aside from the difficulty of keeping track of all this activity, there’s the added drawback of how it can affect your credit score. There’s also the possibility that even if your credit score remains solid, opening too many accounts in a short amount of time could result in your bank denying you a new card.

Before signing up for too many cards, consider what each card can offer (say, no foreign transaction fees, travel rewards or cash back on groceries or gas). Weigh the available bonuses against any card already in possession before making a decision. Don’t get seduced by bonuses—think about what you need.

How Many Credit Cards Should I Have To Build My Credit?

Again, this is a personal decision based on what you think you can handle financially. A primary card for everyday purchases is a great way to steadily and consistently build credit over time.

If you’re someone who has goals for major investments or purchases in the near future and know you would like to build your credit quickly, it may help to add several cards to the mix—especially those with specific loyalty programs so you can keep track of them in a more organized and categorized fashion. And for those with annual fees you have yet another opportunity to regularly pay off debt in a timely manner.

You really only need one credit card to start accumulating credit, but the more you have and the more responsibly you use them, the more opportunities you have to earn points and gradually increase your credit line.

How Many Credit Cards Can I Apply For At Once?

You can apply for as many credit cards as you want at any given time, though it’s not advisable. Not only can it be difficult to track applications and cards, it also doesn’t look good on a credit report. If you are someone who opens credit cards for welcome bonuses or temporary benefits then closes them out before having to pay any fees, this pattern is detectable and banks may decide you are ineligible when applying for certain new cards.

Is It Bad To Apply for Multiple Credit Cards?

Depending on your situation, it may be wise to open credit card accounts slowly over several years. Opening multiple card accounts in a short period of time can actually hurt your credit score and can also jeopardize larger financial goals like getting a low mortgage rate when buying a house. Keep in mind closing out card accounts can also hurt credit score so it is best to be selective while building your credit card portfolio.

Potential Issues With Having a Lot of Credit Cards

As mentioned above, signing up for a lot of cards at once in a short period of time can hurt your credit score. It’s risky business to grab bonus after bonus and spend more than normal to get it.

Is It Bad to Have Multiple Credit Cards?

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. If someone signs up for six different cards all through different credit card companies, then that’s six different mobile apps or websites in need of regular checking to ensure on-time payments. Each card will also likely have a different payment due date.

If cardholders don’t pay off all monthly balances on time, late fees and spiraling debt aren’t the only problems: A growing credit utilization rate will most likely lead to a decrease in credit score. We all drop the ball sometimes in life, but recovering your credit after dropping the ball on credit card payments can be a long and grueling process.

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Bottom Line

Many people carry only one credit card. They have had one card for years, maintain excellent credit and earn substantial cash-back rewards without having to worry about which card they’ll pull out and take with them on any given shopping trip or vacation.

Some folks successfully pursue big rewards and churn-and-burn. They continue to open new cards to chase bonuses or to capture the most deluxe travel rewards. This, of course, involves risk—but can also be rewarding.

Whatever future cardholders decide about how many cards to own, follow these three rules:

  • Use credit cards whenever possible, making sure a reward is earned.
  • Don’t buy anything with a credit card you wouldn’t normally buy with cash.
  • Make sure to pay off each credit card balance in full each month.

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Frequently Asked Questions

Is it bad to not use a credit card?

There is nothing wrong with choosing to use cash or a debit card as your primary or only methods of payment in life. But being aware of the potential benefits of credit cards is important, especially if you’re considering putting your money toward bigger investments such as homes, cars or businesses.

Is it better to pay off one card or pay down several?

Focus on paying off one card at a time—preferably going from smallest debt to biggest—known as the snowball method—or highest interest rate to lowest—the avalanche method. The quicker you can pay off debt, the better for you and your credit score. You will be more efficient if you target one card and work your way up through instead of trying to spread out minimum payments across your multiple cards.

Will two credit cards build faster credit than one?

Yes, assuming you use your cards responsibly. If you do, then having additional cards will generate consistent spending information for the credit bureaus each month, increasing your total credit limit and keeping your credit utilization rate low.

As an enthusiast deeply entrenched in the world of personal finance and credit management, I'd like to delve into the intricate details of the concepts discussed in the provided article.

1. Managing Credit Cards Based on Individual Preferences: The article rightly emphasizes that the decision on how many credit cards to have is highly individualized. It caters to various preferences, including those who prefer a credit card-free lifestyle, individuals comfortable with a single cash-back card, and even those who take a strategic approach to maximizing rewards.

2. Credit Card Options for Different Purposes: The piece introduces the concept of having different cards for various purposes, such as everyday expenses, dining, or travel. It acknowledges the existence of individuals who actively pursue rewards as a hobby, managing multiple cards for optimal benefit. It also touches on the importance of understanding the terms and conditions of credit cards, as illustrated by the detailed review of the Chase Slate Edge card.

3. Building Credit Without Credit Cards: The article discusses the possibility of living without a credit card, highlighting that it's a valid choice for some. However, it also underscores the potential challenges such as building a credit score, which is crucial for significant financial commitments like mortgages.

4. Starting with a Single Cash-Back Card: For those new to credit cards, the article recommends starting with a single cash-back card. It provides examples of suitable options and considers factors like annual fees and acceptance at various retailers.

5. Adding Multiple No-Annual-Fee Cards: The piece suggests adding cards based on spending habits, focusing on specific categories like groceries. It advises against canceling credit cards early in one's credit history, highlighting potential negative impacts on credit scores.

6. Paying Annual Fees for Better Rewards: The article explores the idea of paying annual fees for cards that offer superior rewards, especially in the context of specific brand loyalty, such as travel-related benefits. It provides examples of credit cards catering to different brand loyalties and the potential value they offer.

7. Pursuing Big Rewards and Welcome Bonuses: It acknowledges the allure of big rewards and welcome bonuses but warns about the associated risks, including higher annual fees and the temptation to overspend. Specific premium cards like the Chase Sapphire Reserve and The Platinum Card from American Express are highlighted.

8. Consideration of Credit Card Benefits: The piece emphasizes the importance of understanding and strategizing the unique benefits offered by each credit card. It encourages prospective cardholders to align benefits with their spending habits to optimize rewards and credit scores.

9. Caution Regarding the Number of Credit Cards: The article advises against overextending by acquiring too many credit cards at once, discussing the practice of churning-and-burning and its potential impact on credit scores. It underscores the need to weigh bonuses against existing card benefits.

10. Potential Issues and Responsible Credit Card Usage: The article addresses potential issues related to having many credit cards, such as difficulties in managing payments and varying due dates. It emphasizes responsible credit card usage, including timely payments and avoiding unnecessary debt.

11. Guidance on Credit Card Application Frequency: The piece provides guidance on the frequency of credit card applications, cautioning against applying for too many cards at once. It discusses the detectability of certain patterns, such as opening and closing cards solely for welcome bonuses.

12. Impact on Credit Score: The article emphasizes that opening multiple cards in a short period can adversely affect credit scores. It warns against the risks associated with pursuing bonuses and overspending.

13. Ultimate Recommendations: The conclusion offers concise advice for prospective cardholders, emphasizing the importance of responsible credit card usage, aligning purchases with rewards, and paying off balances in full each month.

In summary, the article comprehensively covers various aspects of credit card management, offering insights for individuals at different stages of their financial journeys and providing valuable guidance on responsible credit usage.

How Many Credit Cards Should I Have? (2024)
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