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As long as you can pay your credit card bill on time each month and maintain a low balance on your first credit card, you should consider getting a second.
The average American has four credit cards and credit card optimizers have as many as 35. While you don't need to reach this average benchmark and definitely don't need to strive to open dozens of cards, having more than one can offer extra benefits if you manage both cards well.
Below, CNBC Select reviews three perks of having more than one credit card.
1. Maximize your rewards
Credit cards come with all sorts of different benefits and bonuses. Some offer travel rewards while others allow cardholders to earn cash back or zero interest on their purchases.
Whatever your goal may be, you can make credit cards work for your lifestyle by having one for each of your different spending needs. Choosing the right mix of credit cards involves taking a look at where you spend most of your money. This way, you know you have a good reason for getting a new credit card.
Below are some of our top choices in popular categories.
2. Increase your credit limit
With each new credit card you get, your credit limit increases. This is an important factor for your credit utilization rate, which measures how much credit you use compared to how much you have. A higher credit limit and a lower balance are essential for a good utilization rate.
Since having more than one credit card increases the overall credit that you have available, it's important tocontinue to keep your balances low so that your utilization stays low. This is the second most important factor in determining your FICO credit score.
3. Have financial flexibility
Multiple credit cards help you afford your everyday purchases but also your emergency expenses.
You can rely on credit when you run into an unexpected expense, but with two cards you can prevent that large expense from hurting your credit score.By splitting the cost of a big expense, such as medical bills, between two credit cards, you are eating up less of your credit limit on one.
This goes back to maintaining a high credit limit overall so that your utilization rate stays low and your credit score remains high. Just make sure you can pay off balances on both credit cards before they start accruing interest.
Bottom line
Credit card optimizers have found a way to make credit work for their lifestyles. If you can pay your balances on time and in full, consider opening up a second credit card to really take advantage of the different spending rewards, an increased credit limit and a potential boost to your credit score.
*Information about the Alliant Cashback Visa® Signature Credit Card,Capital One Savor Cash Rewards Credit Cardhas been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
Multiple credit cards help you afford your everyday purchases but also your emergency expenses. You can rely on credit when you run into an unexpected expense, but with two cards you can prevent that large expense from hurting your credit score.
Is 7 credit cards too many? ›
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.
What are the disadvantages of having multiple credit cards? ›
Ulzheimer explains that having multiple credit cards can help expand your buying power and gives you a lower balance-to-limit ratio, which helps your credit score. However, “the primary con is you can get yourself into a ton of really expensive debt if you're not responsible.”
Is it better to have one credit card or a few? ›
' While a savvy spender can juggle multiple credit cards to make the most of special offers and reward schemes, having several cards will often result in less well-organised cardholders paying out more in interest and fees. The answer therefore depends on your financial situation and how you use the cards.
Do you build credit faster with 2 cards? ›
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.
What are 2 pros and 2 cons of having a credit card? ›
With careful use, credit cards can help you build your credit and accumulate valuable benefits and rewards. Plus, you'll enjoy protection against unauthorized charges. However, interest rates are high, and if you don't pay on time and in full you can accumulate debt and even hurt your credit score.
Is a 700 credit card good? ›
The credit card ranges using the FICO scoring model are: Exceptional: 800-850. Very good: 740-799. Good: 670-739.
Is it bad to have a lot of credit cards with zero balance? ›
However, multiple accounts may be difficult to track, resulting in missed payments that lower your credit score. You must decide what you can manage and what will make you appear most desirable. Having too many cards with a zero balance will not improve your credit score. In fact, it can actually hurt it.
Is it better to close a credit card or leave it open with a zero balance? ›
If you pay off all your credit card accounts (not just the one you're canceling) to $0 before canceling your card, you can avoid a decrease in your credit score. Typically, leaving your credit card accounts open is the best option, even if you're not using them.
How many credit cards should I have to get an 850? ›
Total accounts: You need 21+ accounts to score "Excellent." If you have 20 cards and low utilization, you're seen as more responsible to the credit agencies.
Credit bureaus suggest that five or more accounts — which can be a mix of cards and loans — is a reasonable number to build toward over time. Having very few accounts can make it hard for scoring models to render a score for you.
What if I use 90% of my credit limit? ›
Using over 90% of your credit limit on a credit card can negatively impact your credit score and may result in higher interest rates or fees. It also increases your risk of going over your credit limit, which can lead to additional fees and account closure.
Is 12 credit cards too many? ›
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.
When should you get a second credit card? ›
You might consider a second credit card if your credit score has recently improved, you want to maximize rewards potential or you have high-interest debt you want to transfer to another issuer. Before applying for a second credit card, make sure to review and compare cards.
What's a good credit card to start with? ›
NerdWallet's Best Starter Credit Cards for No Credit of May 2024
- Chase Freedom Rise℠: Best for No-deposit starter card: Solid rewards on everything.
- Discover it® Student Chrome: Best for Student cards: Simplicity and value.
- Discover it® Student Cash Back: Best for Student cards: Bonus category cash-back rewards.
Having multiple credit cards can either help or hurt your credit scores, depending on how you use them. No matter how many credit cards you have, credit basics apply: Keep your balances low and always pay bills on time.
Does having two credit cards lower your credit score? ›
Several credit card applications in a short window of time is correlated with credit risk, and your score will probably drop as a result. If getting one additional card will substantially improve your credit utilization ratio, applying might be smart — but be sure to wait at least six months before you get another.
How does having two credit cards affect your credit? ›
Therefore, every new credit card you open decreases the average length of your credit history. While new card accounts often lower your credit score about five points, it typically rebounds in a few months. However, if you frequently open new cards, the negative effect can add up.
