How Many Credit Cards Should You Have?

The average number of credit cards held by every adult American is estimated to be in the neighborhoods of 3-4 credit/debit cards.

The reasons behind having more than a couple of credit cards vary from one individual to another with some targeting the multiple credit card benefits that come with each card. In fact, some people hold as many as 10 credit cards as they continue to chase the unique benefits associated with reward points gained from each credit card. That’s total frugality.

However, one uncommon theory which also revolves around having multiple credit cards is the ability to improve your credit ratings. Having multiple credit cards can improve a person’s debt utilization and thereby his or her credit score according to various credit analysts.

More credit cards equal lower debt utilization per card

Generally, multiple credit cards will lead to lower debt utilization, which could have a positive impact on your credit score. For instance, assuming a consumer has a monthly debt limit of about $2,000 on every credit card held; having just one or two could result in high debt utilization levels when the person spends close to $4,000 in a month.

On the contrary, if your monthly expenditure is about $5,000 and you hold four credit cards with a debt limit of $2,000 each, then your debt utilization level would be lower. Add a couple more credit cards and you could be having a debt utilization level of less than 30% per credit card.

However, there is also another school of thought which points to the possibility of multiple credit cards becoming a burden to the holder. For instance, it is recommended that you avoid having zero balances on your cards, let alone negative balances. Keeping too many of them can also become a little bit complicated when funding them to offset the debt you owe.

How much does the number of credit cards count towards your FICO score?

Lower debt utilization levels count for less in the final credit score of an individual and thus owning multiple credit cards just to try to lower your debt utilization level may not be as impactful as you would expect. According to Investopedia, the number of credit cards affects the type of credit that you use, which accounts for just 10% of the final FICO score.

Importantly, your debt payment history accounts for 35% while the amount you owe accounts for 30% in the final FICO score. On the other hand, the length of your credit history takes up 15% while any new credit added accounts for the remaining 10%. Therefore, sometimes the numbers do not make the sense that you would expect. However, 10% could still be worth something if you are a heavy spender.

Is it all about credit card benefits?

People have multiple credit cards for various reasons. For instance, you could choose to hold more cards because you want to access the various benefits associated with each like targeting Marriott reward credit card benefits alongside Citi reward credit card benefits.

With Marriott reward credit card benefits, you could enjoy a free stay on one of Marriott’s owned/managed hotels while with Citi rewards credit card benefits, you could redeem your reward points for gift vouchers which can be used in thousands of outlets in the U.S. and even more across the globe.

There are also others that are enticed by various benefits attached to gas credit cards, like Casey’s general store gas credit card, which allows users to save up to 13 cents per gallon plus several other offers that promote frugality.

In summary, having multiple credit cards can yield a variety of benefits to the consumer, but there is nothing that has no limits. This is perhaps the type of question that lingers in a majority of people’s minds.

So how many credit cards would be too many?

Generally, there is nothing wrong with capitalizing in as many secured credit card benefits as possible. However, when the number of cards you hold begins to affect your credit score negatively, then that’s the time you should probably begin to think about which ones you would like to cut loose.

The best way to determine whether the number of credit cards you have is affecting your credit score negatively is by checking whether you are still able to keep track of all of them and maintain positive balances. When they become unmanageable, then that’s the time to pull the plug on some of them to a manageable level.

In pulling the plug, it is always good to assess which cards have similar benefits, as well as, those that are a little bit too expensive to maintain given the various interest expenses. At the end of the day, the right number of credit cards that you should have will be determined by your frugality, ability to repay debt on all of them, and of course how good you are at keeping track of them.


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