How Many Credit Cards Should I Have?

Credit card Q&A: “How many credit cards should I have?”

Credit cards can be useful tools to manage debt and earn rewards for everyday purchases, but they can also cause problems if you’re not responsible.

Aside from landing yourself in serious credit card debt, too many credit cards can drag down your credit score, though it’s unclear how many is too many.

So let’s start with one credit card and work our way up.

I think everyone should have at least one credit card because it’s a safe way to make purchases, establish credit (why we need credit), and can serve as a good emergency back-up if you’re without cash.

There are also great cash back rewards on many credit cards which shouldn’t be ignored.

And if you’ve got one credit card, you should also have a back-up in case your credit card is declined, lost, stolen, or not accepted for some reason.

This is especially important if on vacation or away from home. Imagine if you only carried an American Express card and you could only pay with Visa/MasterCard.

If you travel abroad often, it might serve you well to get your hands on a Capital One credit card, as such cards don’t charge foreign transaction fees.

You may also have credit cards for a particular gas station or a clothing store because of the associated discounts, or a credit card tied to your business.

But before long, your wallet may be an inch thick thanks to all that plastic – this is where things gets dangerous.

You run the chance of getting into major credit card debt and deflating your credit score, as too many credit accounts may indicate greater risk of default.

At the same time, you’ve probably heard that closing credit card accounts hurts your credit score, so what are you to do?

Well, my recommendation is to carry a small amount of credit cards, between 2-5, assuming they all serve a purpose.

A healthy stable of credit cards may look something like this:

- Primary banking institution credit card
- Back-up credit card
- Rewards credit card
- No foreign transaction fee credit card
- Business credit card

It’s generally best to avoid department store credit cards, and individual gas station credit cards aren’t so hot, considering American Express Blue offers 5% cash back on gas as it stands.

If you feel you’ve got too many credit cards, it’s best to close the newest accounts, as old accounts carry more weight in terms of credit score impact.

There are a number of estimates out there, but the average American consumer probably has fewer than five credit cards, so holding more than five could lower your credit score.

Read more: How to cancel a credit card.