How Many Credit Cards Should You Have?

Sarah Tecla, Assistant Preferred Banking Office Manager, First Republic Bank
May 11, 2022

  • The average American has three credit cards.
  • However, there's no right number of credit cards you should have.
  • How many credit cards you have depends on your financial needs.

The average American has three credit cards, according to Experian's 2021 State of Credit report. It's a figure that begs the question: How many credit cards should you have? Is three the right number? Is having more or less better? 

There's no right number of credit cards. Instead, how many credit cards you should have depends on your financial situation and personal needs. In some cases, having more than one card offers financial advantages. However, in other instances, one card may be the best route. 

Read this article to determine how many credit cards work for you, how credit cards influence your credit score and tips for managing multiple credit cards. 

How many credit cards is too many?

There's no correct number of credit cards that any one person should have. For example, if you have good credit, then having multiple cards — and managing them responsibly — can help you maintain and even improve your credit score. 

On the other hand, if you're struggling with debt or rebuilding a low credit score, one or two cards may make more sense. You don't have to manage multiple billing cycles or keep track of numerous monthly payments. Multiple cards could also negatively affect your financial situation and credit score if they cause you to spend more or miss payments. 

To help determine how many cards work best for you, consider your answers to the following questions: 

  Consider Opening Another Credit Card Reevaluate Opening Another Credit Card
Do I tend to overspend with my credit card(s)?   X
Is my credit score in the "good" or "excellent" range? X  
Do I pay my existing credit card balances in full and on time? X  
Will I be taking out a loan, mortgage or another credit line soon?   X
Do I need another card for a specific purpose? X  


Is it good to have multiple credit cards?

Having multiple credit cards can be beneficial if responsibly using and managing your credit cards comes easily to you. Here are some of the benefits and risks of having multiple credit cards: 

Benefits of having multiple credit cards

  • Increases credit limit: A higher overall credit limit — the total amount you can charge across all of your credit cards — means you can charge more if you need to. 
  • Helps keep credit utilization low: Multiple cards make it easier to keep your credit utilization ratio — which is the amount of your total credit you’re using — lower. Low credit utilization can help you improve your credit score. 
  • Maximizes rewards: Credit cards also allow you to earn rewards from spending, from airline miles to cash back to hotel points. Multiple cards enable you to maximize those rewards. 
  • Provides a backup card for emergencies: If you have a financial crisis that you can’t cover with your emergency fund, additional credit cards can help. 

Risks of having multiple credit cards

  • Temptation to overspend: Having a higher credit limit could tempt some people to spend more than they should or live outside their means. 
  • Difficult to stay organized: Multiple credit cards mean multiple accounts to track and payments to make. 
  • Potential increase in interest fees: If you’re carrying balances on various cards, you’re likely paying interest on each balance, meaning an increase in the total interest you’re paying. 
  • Can hurt credit score: If you miss payments due to having multiple cards, you can damage your credit score. Numerous credit inquiries for new card applications can also negatively affect your score. 

How the number of cards you have can affect your credit score

The number of cards you have can affect your credit score in several ways, both good and not-so-good. Consider the following impacts that multiple credit cards can have on your credit score: 

  • Credit utilization: This refers to the ratio of credit you’re using to your credit limit. A lower credit utilization ratio can help improve your credit score
  • Credit inquiries: When you apply for a credit card, the credit card company performs a credit check of your credit history and credit score. Having too many inquiries can negatively affect your credit score. 
  • Age of accounts: How long you’ve had individual credit cards can also help improve your score. Keeping credit cards for longer is considered better. Similarly, opening a new card may lower your average age of accounts, which could adversely impact your credit score, depending on the scoring formula.
  • Payment history: This refers to your track record of paying your credit card and other bills. Paying on time is the best way to maintain and improve your credit score. 
How Many Credit Cards Should You Have to Build Credit?
You can start to build a credit history with one credit card. Adding more credit cards can help you build credit faster — you’ll increase your credit limit and improve your credit utilization ratio — as long as you manage them responsibly.

Tips for managing multiple credit cards

Responsibly managing multiple credit cards is possible. The key is staying organized and keeping your spending under control. 

  • Track all credit card balances and monthly payments: Use a budgeting app, mobile banking app or even a simple spreadsheet to track your monthly payments and total credit card balances. This way, you’ll have a good sense of what you owe and how much more you can or should spend on each card. 
  • Budget how much you can spend on each card: Determine the credit limit for each card and how much of that limit you want to use. Keep in mind that a credit utilization ratio of 30% or less is generally considered good for your credit score.
  • Monitor spending habits: Track how much you spend each month on each card, and consider whether you can pay off the credit debt each month. Carrying a balance means you’re accruing interest, making your spending cost that much more. 
  • Pay on time and in full: Make your payments when they’re due, and pay off your balance. By doing so, you can avoid late payments and sidestep costly interest fees on credit card balances. 
  • Don’t use all of your available credit: Even if you have multiple credit cards, you don’t want to use all of your available credit. Keep your overall credit utilization ratio as low as possible to preserve your credit score and lessen your credit debt. 

Choosing credit cards that work for you

You may opt for multiple credit cards, but what kinds of cards should you get? Different types of credit cards serve different purposes and provide various benefits. Choose the right credit card based on your financial needs, interests and goals. 

Type of Credit Card Best Credit Card to Use For
Cash Back Cards Accumulating cash rewards to put toward larger financial goals, such as an emergency fund or vacation fund
Rewards Credit Cards Obtaining points, rewards or cash — you can choose the reward that works best for you
Travel Credit Cards Saving points or miles that make purchasing travel or airfare cheaper or even free
Retail Credit Cards Getting discounts on purchases at your favorite retailer

There’s no ideal number of credit cards that you should have. Instead, the right number is specific to your financial needs and goals. In the right scenario, multiple credit cards can help you improve your credit score, earn more rewards and provide a financial cushion if you need additional credit.

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