Credit cards – can you have too many?

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If your mailbox looks anything like mine, you probably get a few different credit card offers each week. Some boast a 0% APR, some have a rewards program, and others offer 0% balance transfers. But how do you know what credit card is best, and is there such a thing as having too many cards?

About three out of four U.S. adults have at least one credit card, according to a 2016 Gallup report.  But there really is no magic number for how many credit cards a person should have. Some financial pros say one card is enough, whereas others advocate for using multiple credit cards. We’ll breakdown the 2 schools of thoughts to help you determine how many cards you should have in your wallet.

Multiple cards

If you pay off any credit card usage at the end of each month, having multiple cards may be the right strategy, especially if you can reap rewards. There are rewards for everything from airline miles, gas cards, to cashback. Choose the one that gets you the most rewards that are useful to your lifestyle. Don’t sign up for an airline reward card if you hate flying, instead choose a card with cash back or gas rewards.

Using multiple credit cards could positively impact your FICO score by helping improve your debt-to-credit utilization ratio. The rule of thumb is to keep this ratio below 30% – the lower the better. BUT – make sure you use that credit responsibly—having additional lines of credit doesn’t give you license to charge more.

It helps to have a backup credit card if you’re in a pinch. While chip cards have made it more difficult for hackers to steal credit card information, it still happens to about 22% of Americans based on a Gallup poll. If your credit card information is compromised, it typically takes several days to get a new one, so having a second one on hand as a backup can be helpful.

One card

Carrying a greater number of cards means the potential for racking up a greater amount of debt, despite all the potential benefits. If you destroy your credit score by consistently missing payments on multiple cards, it could take years to rebuild that number. Consider these benefits to having only 1 credit card.

It’s easier to manage. Having only one or two credit cards means fewer statements to review each month, and less bills to pay out. The more credit cards you have, the greater number of billing cycles you’ll likely have to keep track of and to make sure you have enough money left in your account. Having multiple due dates scattered throughout the month can make this even more difficult to track.

It may be easier to track your spending. With multiple cards, you may not get a clear picture of your spending and find it hard to stick to a budget. Research shows that people tend to spend more when they shop with a credit card instead of cash. By reducing the number of credit cards you have available to you, you could effectively help limit your ability to overspend.

Keep that debt in check. Having fewer credit cards and a lower available credit limit means less opportunity to dig yourself into credit card debt. If you do carry a balance, it’s at least all on one credit card, which helps you see how much credit card debt you have—and have left to pay off—at any given time.

It reduces hard credit score inquiries. When you apply for a credit card, it triggers a “hard inquiry” on your credit report. A hard inquiry happens whenever a potential lender is checking your creditworthiness, and it dings your credit score by up to five points. Five points doesn’t sound like a lot, but they can add up over time and prevent you from qualifying for the best interest rates on various types of loans or lines of credit.

There is no hard and fast rule for how many credit cards you should have. The “right” number depends on your spending behaviors, financial goals and how responsibly you manage your credit.

Is your mailbox crammed with credit card offers? What are some of the best and worst offers you’ve seen?







Susan Dickinson
Assistant Vice President, Lakeville Manager

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