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How Many Credit Cards is Too Many to Have?

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How Many Credit Cards is Too Many to Have?

Credit cards are good, but given how complex the credit card system is and operates, you may need multiple credit cards. The answer to how many credit cards is too many to have come down to individuals and what financial needs they have to take care of. Keeping multiple credit cards can be good and bad, depending on how you utilize your credit limits on these credit cards.

Too many cards can help you if you have to make purchases to a fixed amount monthly and still keep your spending limit to the recommended 30%, which improves your credit score. It can also be bad if you use over 70% of your credit limit on multiple credit cards because you may face problems paying off the credit card companies, which will impact your credit score.

You may think you’re just trying to keep a few cards in your wallet, but the truth is that your wallet might be a little out of control. You can’t see inside it, but it’s possible that you have enough plastic in there to construct an entire house of cards. If this is the case, or if you’ve ever wondered how many credit cards are too many, read on!

Is It Good to Have Multiple Credit Cards?

While there’s no hard and fast rule regarding how many credit cards you should have, sometimes it can be beneficial to have multiple accounts. If you’re in the market for a rewards credit card, a good rule is that people with excellent credit should aim for at least three rewards cards at once.

You’ll want one travel rewards card, one cashback rewards card, and one hotel or airline loyalty program credit card. However, suppose your finances are not in order yet, and you’re looking to rebuild your score after bankruptcy or previous bad financial decisions (like maxing out all your available lines of credit). In that case, two may be enough while you work on rebuilding your financial health. But if your finances are in good health, you can have as many credit cards as your finances can sustain.

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How Many Credit Cards Should You Have?

The correct number of credit cards is one for conservative-minded credit card users. But if you are not a conservative credit card user, you can afford to have more than on credit card, as your finances can sustain that based on your income. But not that having multiple credit cards can negatively affect your credit score, especially if they’re all from the same institution. For example, let’s say you have two Bank of America cards totaling $10,000.

If the bank decides it wants to close one of those accounts to improve its own financial health or for any reason, then it will probably close both accounts for that reason and lower your overall score by 20 points or so, a significant amount when you consider how many points are already lost through possibly missed payments or late payments on loans and mortgages.

The Impact of Multiple Credits on Your Credit Score

The impact of multiple cards on your credit score is not straightforward. It depends on the number of cards you have, the type, how old they are, and how much debt you have. If you only have a couple of cards, but they are all very old, then it’s possible that having two or three more might improve your score (depending on whether or not there is an increase in total balances).

On the other hand, if you have four or more open lines of credit and some recent activity from them – such as new charges – this could reduce your score by 10-15 points, depending on the specific situation. Generally speaking, however, having multiple open accounts with a good payment history will help boost your credit Score.

How Many Credit Cards is Too Many to Have?

Downsides of Too Many Cards 

When it comes to the downsides of having too many cards, the most obvious one is that it may be challenging to keep track of them. If you have too many cards in your wallet, or if some of your cards are lost or stolen, keeping track of which credit card has what amount available on it can be challenging. It also makes it more difficult for banks and other merchants to verify that they’re dealing with the right person when they try to process a transaction.

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Some people worry about the impact of too many cards on their score because using multiple cards (or using them regularly) can make it seem like they’re borrowing money more often than they are. However, these concerns aren’t as important now as they used to be because lenders don’t look at how often you borrow money anymore; instead, they look at how much debt you owe overall and whether or not that’s reasonable based on your income level and other factors related directly back into your FICO score.

Should You Carry a Credit Card for Emergencies?

If you want to build your credit, a credit card is an excellent way to do it. If you carry no debt and make all of your payments on time, it can help your score significantly. Using your cards wisely can be essential for building good habits that will last throughout life. Just remember not to overspend or carry too many accounts at once and remember that using a debit card for transactions instead of cash will help build credit faster than using cash would.

Tips on Managing Multiple Cards

If you’re thinking about adding more cards to your wallet, there are a few things you should keep in mind:

  • First and foremost, keeping track of your spending is imperative. If you don’t know how much money is going out each month or where it’s going, how will you know if there’s room for another charge?
  • The best way to manage multiple cards is by using a spreadsheet or budgeting apps. These tools can help you see the charges on each card so that they don’t get mixed up with other expenses.
  • The budgeting apps will also show you which specific purchases were made on each card which comes in handy when making payments on time every month.
  • Finally, it’s essential not just to use these apps but follow through with whatever plan they create for your finances.

Final Wrap Up

It’s essential to know the right way to manage your credit cards. Too many can affect your credit score, but you might miss out on rewards or cash-back opportunities if you don’t have enough. The best solution is to establish an appropriate number of cards based on your income level and spending habits to make sense regarding rewards potential and fees.

Kevin Afoma Onwuagbanusi is a freelance writer and a graduate of Mechanical Engineering (BEng.) and Masters in Accounting (MSc) with 8+ years of experience writing across several niches, with a remarkable likeness to crypto, and personal finances, automotive, games, and technology.

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