Manage Multiple Credit Cards: How Many Credit Cards Are Enough

How to Build a Strong Credit History with Multiple Credit Cards

Every person must have thought about "How many credit cards should I have?" Right? This question comes up because people want to improve their financial situation. Addressing the pros and cons of multiple credit cards will assist you financially. Whatever number of cards you have, your credit limit affects your scores. 

How Many Credit Cards Should You Have?

The number of credit cards you need depends on your comfort with annual fees, card advantages, and rewards goals. 

1- The Minimalist Approach: 1-2 Credit Cards

Having one or two credit cards suffice for those who appreciate simplicity in financial management. The best route is often to start with a no-annual-fee, flat-rate cashback card. This approach allows you to earn a little cash back on every purchase without keeping track of bonus categories or annual fees.

As you grow more comfortable with managing your credit card(s), consider adding another card. Securing a new card can boost your credit availability, enrich your reward potential, and even present an attractive sign-up bonus. If you already have a robust flat-rate card, aim for a card offering bonus rewards that align with your spending habits—travel, groceries, dining out, or something else.

2- The Intermediate Approach: 3-5 Credit Cards

This is the category where most people land. With three to five credit cards, you can maximize rewards across almost all major spending categories. A healthy combination includes at least one good flat-rate card (offering a minimum of 2% cash back on all purchases) and two to four other cards focusing on your most frequent purchases.

3- The Reward Aficionado: 6+ Credit Cards

Taking a step into the territory of six or more credit cards, you're venturing into a realm where earning credit card rewards starts to feel more like a hobby—a profitable one, in many cases. Some individuals, like Luke Thomas, opened 24 credit cards in eight years and have managed to build excellent credit scores and fund globetrotting adventures.

However, it's crucial to maintain sight amidst the swelling tally of cards. If managing card details becomes challenging, it's time to get organized. Make a spreadsheet tracking annual fees, payment due dates, bonus categories, sign-up bonus deadlines, and other perks—especially if autopay isn't an option. Remember, even premium credit cards are worth the annual fees only if you use the benefits.

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Pros & Cons of Having Multiple Credit Cards

Multiple credit cards have benefits and drawbacks, like any financial decision. Let's discuss both in detail.

The Upsides of Having Multiple Credit Cards

  1. Keeps Credit Utilization Ratio Low: Suppose you have a single credit card and use 90% of the limit. In that case, it can hurt your credit utilization ratio, an essential credit score factor. Suppose you have multiple credit cards and use just 50% of your combined credit limit. In that case, it will help maintain a favorable utilization ratio.

  2. Builds Credit Score: People who hold several credit cards and consistently make all payments on time enjoy a boost in their credit scores. Such positive behavior lifts their creditworthiness, opening doors to more credit opportunities.

  3. Increases Credit Limit: Each credit card you have contributes to your overall credit limit. However, remember that this extended financial power comes with the responsibility of careful use.

  4. Opportunity for More Rewards and Cashbacks: Multiple credit cards give you access to various card-related benefits, like cashback and reward points, thereby multiplying your savings.

The Downsides of Having Multiple Credit Cards

  1. Difficulty in Management: Juggling multiple cards means dealing with separate billing cycles, credit limits, and payment due dates, making management complex. Also, missing any payment due date, even by accident, can damage your credit score.

  2. Risk of Unnecessary Debt: The temptation that comes with greater access to credit can be a double-edged sword. It can lead to overspending, gradually piling up more debt if not handled cautiously.

Tips on Managing Multiple Cards 

Maximize Available Rewards: 

Try to leverage the rewards potential of each card for every purchase.

Use the Right Card for the Right Purchase: 

For example, use a Discover Cash Back card while shopping in its rotating 5% cash back categories, such as groceries, hotels, restaurants, and gas. Switch to another card offering 2% cash back on gas when Discover isn't providing high rewards.

Use a Base Card for Flat Cash Back: 

Have a card that provides you a flat 1% back on all purchases. For purchases without a higher reward, use this card.

Leverage Store-branded Credit Cards: 

Consider a card with considerable discounts if you expect to shop heavily in a store (such as over the holidays, back-to-school, or for big-ticket appliances). Leverage the discount by paying off the debt immediately.

Close Unnecessary Store Cards: 

If the store card is no longer needed or doesn't offer ongoing benefits, consider closing it to simplify credit card management.

Avoid Going Overboard: 

While multiple cards can increase rewards, they also increase the complexity of your financial management. You will lose your money and savings if you misplace your credit card. 


So, the next time you think about "How many credit cards should I have?" to manage your finances correctly, remember the above tips and ways to use multiple credit cards. You should only choose cards based on your needs and financial management. Starting with a single credit card is a great approach. Feel free to explore multiple credit cards if you can handle them efficiently. 

The advantages of having multiple credit cards can be enticing, with an array of rewards and perks waiting to boost your savings. The 'right' number of credit cards allows for this sweet equilibrium, enhancing financial strength while keeping financial peace intact.

Frequently Asked Questions

1. Do I need to meet any criteria to hold multiple credit cards?

Indeed, holding multiple credit cards requires careful maintenance to avoid spiraling credit card debt. It's worth noting that banks perform a detailed review of your credit report, credit score, and other factors before issuing an additional credit card to you.

2. How many credit cards can I hold concurrently?

Ideally, it's suggested not to hold more than two credit cards at a time. However, you could possess up to three cards, provided you consistently repay the outstanding balance for each card monthly.

3. How does having multiple credit cards influence my credit score?

Possessing several credit cards and managing them responsibly by making timely payments can enhance your credit score.

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22 Oct, 2023


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