The way people use credit cards varies greatly. Many people get by with just one credit card. Some people have five or more in their wallets.
There are many possible answers to how many credit cards you should have. The number that works best for you will depend on your spending capacity, budget, lifestyle needs, credit history, credit score, and personal credit card usage tolerance.
Let’s look at the factors that influence that number.
Your Credit Score
Your credit score does not directly influence how many credit cards you should or can have. However, it helps determine the types of credit cards you could qualify for. If your credit score is low or you don’t have much credit history, you’re not ready to load up on credit cards.
Credit Card Fees
Many premium credit cards have annual fees, which increases the price of carrying one. However, if you charge enough to these cards, your accumulated rewards will cancel out this recurring payment. Only apply for annual-fee cards if the perks and benefits outweigh the fees.
Interest Rates
Always ensure that your credit card usage aligns with your ability to repay your charges. That said, the interest rate is an important consideration if you plan to carry a balance. Look for credit cards with low or 0% APR introductory offers on balance transfers, purchases, or both.
Sign-Up Bonuses
The sign-up bonus is the most common credit card perk for new cardholders. You receive a sizable cash or rewards point bonus in exchange for exceeding a set spending threshold within a specified time frame. Before applying for a credit card with a generous sign-up bonus, ensure you’ll use it in the long run.
Card Advantages and Rewards
Card rewards offer great benefits. They can be a significant differentiating factor between two cards that are otherwise identical. If you apply for multiple cards with valuable perks, ensure each one serves a specific purpose. For example, you could use one card for travel expenses and another for everyday purchases.
Your Payment Management Abilities
Consider your ability to manage balances and payments before applying for another credit card. To keep things simple, find an issuer you trust and keep most of your credit card accounts with them. This way, all your credit cards and their balances will appear in a single online dashboard.
Your Ability to Be Financially Responsible
Finally, consider your level of financial responsibility. Be honest with yourself and avoid taking on more than you can handle. If you are concerned about your ability to manage your credit card spending, consider applying for a secured credit card.