How Many Credit Cards Should I Have?

While there’s no one definitive answer to the question of how many credit cards one “should” have, the rule of thumb is to have no more than you can handle responsibly, while paying all your bills on time and carrying little to no debt. For some people, this may mean even one credit card is too many!

It all hinges on how much time you’re willing to put into staying organized, says Beverly Harzog, Credit Card Expert and Consumer Finance Analyst for U.S. News & World Report. “The more cards you have, the more organized you need to be to manage them responsibly.” With more cards, not only is it easier to fall behind on payments, but it can be harder to profit from rewards. “Someone with an overload of cards probably isn’t remembering which one to use to earn the most points at the department store.”

With that said, if you know you’re the kind of person who will keep up with your payments and maximize your rewards, you may want to consider having two cards. Why two? You never know when a card could be lost, stolen, or compromised — and some cards are simply not accepted everywhere. Having two puts you in the “safe” zone of always being able to grab a tank of gas, a meal, or plane ticket home, should an emergency arise. There’s also an argument for having two where one has a low interest rate and is the one you use if you need to pay off a purchase over time, and the other — which you pay off monthly — gives you some sort of rewards or cash back for usage.

Your Credit Cards and Your Credit Score

“Credit cards are a method of payment, but also a vehicle of maintaining and building your credit score,” says credit card expert Jason Steele. When it comes to your score, the more cards you can manage responsibly, the better. “Credit cards are essentially a loan. The more loans you have and pay back on time, the more credit-worthy you appear to be.” Having a good credit score is all about having positive information in your credit history. Two cards open in good standing is better than one. Three cards open in good standing is better than two. But at a certain point you get diminishing returns — 20 cards is not better than 10. “Once you get beyond five or six, there’s little added benefit for your credit score.”

Also, too many new cards opened at once can damage your credit. “If you open multiple cards in a short period of time, that’ll be seen as an indication that you might be in financial trouble,” Steele says.

Adding a New Card

Perhaps you’re suddenly spending more in a category you didn’t used to, and you want to reap potential rewards. Say your family’s grown in size, and now you’re buying more groceries. It may be time for a card that will give you cash-back, specifically for grocery purchases. In other words, it’s always good to seek out cards that are more in line with your spending, says Harzog.

“When it comes to maximizing your rewards, having multiple credit cards is like having multiple tools. Each is for a different type of purchase,” says Steele. And there are many tools to choose from — Steele compares a credit card to a smartphone in that, as time passes, it can become antiquated. “If you’re using a credit card that you’ve had for seven or eight years, it’s kind of like using a phone you’ve had for a long time. You’re not going to see the same features and benefits that you would on a card that’s come out more recently.”

Canceling a Card

Keep in mind, it’s always best to cancel a card if you have more cards than you can handle responsibly. “You need to have a budget for each credit card you have. If you can’t stay within that, you need to spend less or get rid of a card,” says Harzog. Also, if you have a substantial annual fee on a card that isn’t offset by the benefits you’re getting from it, that’s another reason you might cancel.

Note that if you cancel a card, it could ding your credit score by increasing the percentage of your available credit that you’re using, explains Steele. But the less debt you have, and the more cards you have, the smaller the dent. Ultimately — when it comes to the number of credit cards that are right for you, you have to know what you can manage, and get strategic with everything from rewards strategies to paying all your bills on time, every month.

With Molly Povich