Posted on: Oct. 18, 2017 in Credit

How many credit cards do you have in your wallet? What about back at home in a drawer? The average American, if they have a credit card at all, has 3.7 cards according to Gallup. Do you think this is too many or too few? The answer is that it all depends.


Credit is a convenience the majority of Americans enjoy. It allows them to shop online, book travel arrangements, and pay for things without having to carry around cash. Many also use credit cards for the perks – points, cash back, or frequent flyer miles, for example.

So, if you’re using credit to get a certain kind of bonus, then obviously you want to have a credit card that gives you that bonus. Even if you already have one or more cards, that new card with specific perks can really benefit you.

Another reason you may wish to open a new card is for a discount or special financing with a store. While these perks are very often valuable up front, the interest rate charged by many store credit cards is well over that of a regular card. You’ll want to make sure you pay the card off in full each month or your savings will be wiped out.

Some credit cards offer terrific balance transfer offers or zero interest for the initial period. Again, this can make a card quite tempting because it does offer a chance to save money. As long as you read the fine print and use the card responsibly, there’s little harm in taking out a card for these reasons.

Overall, having multiple cards doesn’t hurt your credit score. In fact, if you don’t carry balances on them, multiple cards may even help you. This is because a portion of your credit score is based on your utilization ratio – that is, the amount of credit you have available compared to the amount you owe. The more credit you still have available, the better off you are.

Having multiple cards becomes a problem when you actually use them all and don’t fully pay off your balance. You can’t incur $10,000 in debt if you only have a credit limit of $2,000. Therefore, if you’ll be too tempted to spend, you may be better off limiting the amount of credit you have available.

Finally, opening many cards all at once can also hurt your score. If you’re suddenly opening card after card, it will appear as though you’re desperate for money fast and you’re at risk of racking up debt quickly. Every time a card makes a hard inquiry of your credit history, your credit score will drop a few points. Applying for several cards means your score will drop. These inquiries will remain on your credit report for up to two years.

There’s no hard and fast rule for how many cards to have. As long as you use them responsibly, pay on time, and, ideally, pay them in full each month, having multiple cards will hardly matter at all.

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