How Many Credit Cards Should You Have?

Should you have more than one credit card? If you’ve ever spent your way into a massive pile of credit card debt, then you might say that the answer is yes.

It’s certainly true that taking out multiple credit cards can make your debt repayments unsustainable. However, there is no simple answer as to how many credit cards you should have, and there can even be advantages to having more than one credit card. Most experts agree that having multiple credit cards can either help or hinder your credit score, depending on how well you manage them.

This hasn’t stopped Americans from taking advantage of the credit cards offered to them. A recent Experian report shows that the average American now holds around 4 credit cards. That figure is down slightly from previous years, and it follows a pattern of U.S. consumers shedding credit card debt as the coronavirus pandemic spread financial uncertainty.

Is It Good to Have Multiple Credit Cards?

Having multiple credit cards could allow you more spending power and more opportunity to earn points, miles or cash back if you’re using rewards cards. However, the effect on your credit score is probably one of your major concerns about having multiple credit cards. That is a common consideration, but having more than one credit card can actually help your credit score by making it easier to keep your credit utilization ratio low.

For example, if you have one credit card with a $2,000 credit limit and you charge an average of $1,800 a month to your card, then your credit utilization ratio—the amount of available credit that you use—is 90%. Where credit scores are concerned, a high credit utilization ratio will impair your credit score. It may not seem fair—if you have just one card and pay it off in full and on time every month, then why should you be penalized for using most of your credit limit? But that’s how the credit scoring system works.

To improve your credit score, most credit experts recommend that you should avoid using more than 30% of your available credit per card at any given time. By spreading your $1,800 in purchases across several cards, it becomes much easier to keep your credit utilization ratio low.

This ratio is just one of the factors that the FICO credit scoring model takes into account in the “amounts owed” component of your score, but this component makes up 30% of your credit score. Only your payment history is weighted more heavily (at 35%) in determining your credit score.

How Many Credit Cards Should You Have?

There is no magic number to that question because everyone’s situation is different. A strong argument can be made for having at least one credit card to take advantage of the inherent convenience, security, and other benefits. Justifying having more than one credit card can depend on whether you need the extra credit lines to accommodate your monthly discretionary budget or seek to leverage your everyday spending to earn various types of rewards like cash back, points, or airline miles.

Downsides of Too Many Credit Cards

Even having two credit cards can be one too many if you can’t afford to pay your bills, don’t need them, or don’t plan to use them for some purpose.

While getting a new credit card can sometimes improve your credit score by potentially lowering your total credit line utilization ratio, getting a lot of cards in a short period of time is not advised. Many card issuers even have rules in place to combat this phenomenon, which has arisen with customers who try to game the system by signing up for lots of credit cards to earn bonuses and then cancel their cards after meeting the spending requirements. For example, Chase has a policy termed 5/24, which doesn’t allow you to be approved if you have applied for more than five credit cards (regardless of the issuer) in the past 24 months.

Having multiple cards can mean multiple fees and interest charges that accumulate in several places. Premium cards often come with annual membership fees and other cards may have teaser introductory rates that shoot up after several months. Keeping track of all of this, even with relatively small balances, can become complicated.

The Impact on Your Credit Score

Another potential downside of having a large number of cards is that it can make you look risky to lenders and lower your credit score. Even if you have them all paid off, the mere fact that you have a lot of open and available credit lines can make you look like a potential liability to the next lender.

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.

Tips on Managing Multiple Cards

Having an array of credit cards can allow you to earn the maximum available rewards on every purchase that you make with a credit card.

For example, you might have a Discover it Cash Back card to take advantage of its rotating 5% cash-back categories so that in certain months, you can earn 5% back on purchases such as groceries, hotels, restaurants, and gas (subject to a cap of $1,500 in combined spending per quarter). You might have another card that always gives you 2% back on gas. Use this card during the nine months of the year when Discover isn’t paying 5% cash back on gas.

Additionally, you might have a card that offers a flat 1% back on all purchases. This card is your primary card for any purchase where a higher reward isn’t available. For example, you might be able to earn 5% on all clothing purchases in October, November, and December with your Discover card; the rest of the year, when no special bonus is available, you would use the 1% cash-back card.

Another consideration is store-branded credit cards that can only be used for purchases in that particular store or on their website. Opening a new store credit card that offers a significant discount on those purchases can be a huge benefit if you’re doing a lot of shopping in one place; for example, back-to-school shopping, holiday shopping, or a major purchase like appliances for your home. Getting such a card and paying it off right away can be advantageous to get the discount, but it may also be a good idea to close the store card afterward if it is no longer needed.

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Of course, you don’t want to go overboard—if you have too many accounts, it’s easy to forget a bill payment or even lose a card. The problems that can result from such oversight will quickly ruin any savings that you might have earned.

Compromised Cards

Sometimes a credit card company will freeze or cancel your card out of the blue if they detect potentially fraudulent activity or suspect that your account number might have been compromised.

In a best-case scenario, you won’t be able to use your card until you talk to the credit card company and confirm that you are, indeed, on vacation in Bermuda and your card has not been stolen. That’s not a phone call that you can make from the cash register, however, because you’ll have to provide sensitive personal information to confirm your identity. You’ll need another way to pay if you want to complete your purchase.

In a worst-case scenario, the company will issue you a new account number, and you’ll be without that card for a few days until you receive your new card in the mail. Another possibility is that you could lose a card or have one stolen. To prepare, you might want to have at least three cards: two that you carry with you and one that you store in a safe place at home. This way, you should always have at least one card that you can use.

Because of possibilities like these, it’s a good idea to have at least two or three credit cards. If you only want to have a single credit card, make sure that you’re always prepared with a backup payment method, whether cash or a debit card. These cards offer convenience and security, but are they worth it? Check the fees, if any, and be especially careful about prepaid debit cards.

The Bottom Line

There are many benefits to having multiple credit cards, but only if you manage them responsibly. To ensure that having several credit card accounts will work for you, not against you, be aware of the benefits that each card offers, your credit limit on each account, and especially your payment due dates.

Use each card to your best advantage, make sure to keep your balances low, and if possible, always pay your balances in full on or before the due dates. And of course, remember to compare the best credit card options for your needs and credit profile before opening any new accounts.

— Update: 30-12-2022 — found an additional article How Many Credit Cards Should I Have? from the website for the keyword benefits of having 2 credit cards.

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 financially responsible the cardholder is. According to Experian, Millennials have an average of 2.5 cards each, while Baby Boomers average 3.5.

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.

How Many Credit Cards Should I Have?

The number of cards you should have depends entirely on your unique financial situation and spending history. The most important thing to ask is if you can 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 consider student credit cards which 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.

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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 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 Signature® 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 certificate that allows cardholders to take a companion anywhere from just $121 ($99 fare plus taxes and fees from $22). Add in the $75 annual fee for the Alaska Airlines Visa Signature® credit card and cardholders are basically getting an airline ticket of any value for a companion for about $200. 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.

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 or through the Pay Yourself Back feature. 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.

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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?

If you’ve recently begun to accumulate your card collection, it may also help 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 scores 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.

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.

To view rates and fees for Blue Cash Preferred® Card from American Express please visit this page.
To view rates and fees for Blue Cash Everyday® Card from American Express please visit this page.
To view rates and fees for The Platinum Card® from American Express please visit this page.

Frequently Asked Questions

— Update: 30-12-2022 — found an additional article Multiple Credit Cards: What are the benefits and drawbacks? from the website for the keyword benefits of having 2 credit cards.

Advantages of having multiple credit cards

• Become eligible for a higher credit limit

As we saw, a credit card allows you to withdraw an amount up to a pre-determined credit limit. For example, if the credit limit on your credit card is Rs 50,000, it means you can use it to borrow up to Rs 50,000 for various purposes.

However, having multiple credit cards gives you access to a higher credit limit. For example, if you have three credit cards with credit limits of Rs 50,000, Rs 60,000, and Rs 40,000, your total credit limit will be Rs 1.5 lakh.

• Enjoy a longer interest-free period

The interest-free period you get on your credit card depends on its billing cycle. If your card’s billing cycle ends on the last date of every month, you can enjoy an interest-free period on payment made on (say) the 18th of the month for 30 days. Similarly, if you make a payment on the last day of a month, you can enjoy only 18 days interest-free period on it.

However, if you have multiple credit cards with different billing cycles, you can juggle your payments between them to enjoy a maximum interest-free period. For instance, if you have a second card whose billing cycle ends on the 15th of every month, you can use your first card for shopping till the 15th of every month and then use your second card from the 15th to the 30th.

• Get more reward points and offers

You can earn reward points and cashback by shopping or paying using your credit cards. You also get credit card offers on movie tickets, grocery purchases, travel tickets, etc. By having multiple credit cards, you can get more reward points and additional offers. For example, if you want to watch a movie, you can use a credit card that offers maximum discounts on movie tickets. To note, IDFC FIRST Bank gives a ‘Buy one, get one’ offer on movie tickets up to ₹250 on Paytm mobile app, valid twice per month.

Or, if you are planning to book a trip, you can use a travel credit card that offers attractive discounts on flight tickets and hotel accommodations.

• Give your credit score a boost

Having multiple credit cards can also help your credit score. Your credit utilisation ratio plays a significant role in determining your credit score. You get a greater credit limit when you have multiple credit cards, and your credit utilisation ratio stays low even after extensive use.

For example, suppose you have a total credit limit of Rs 2 lakh across three credit cards. You face an unexpected expense and use Rs 1 lakh from your credit limit. Even in this scenario, your credit utilisation ratio will remain at 50%, and your credit score won’t get hampered.

Disadvantages of having multiple credit cards

• They can be difficult to manage

Credit cards have different payment cycles and can become challenging to manage. Keeping track of all credit card due dates and payments can be quite a task. If you miss any credit card payment date, you will start incurring interest at a high rate.

• There is an increased debt risk

While having multiple credit cards provides you access to a greater credit limit, it also increases your debt risk. You may end up spending more than you should. If you don’t use your credit cards wisely, you may even fall into a debt trap.

• Your credit score may fall

We saw that having multiple credit cards can help your credit score. But on the flip side, when you apply for a new credit card with a bank or NBFC, it conducts a soft inquiry on your credit score. And each time such an inquiry is made, your credit score drops temporarily.


There are many benefits of having multiple credit cards. It can be a good idea if you can use all your credit cards smartly. So, knowing how to use a credit card wisely is crucial. With IDFC FIRST Bank, you can get a lifetime free credit card and earn up to 10x reward points on every purchase. Click here for more details!



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