All of us know that one person who has a wallet with literally twenty card slots and they have them all filled with actual cards. One could argue that that person has too many credit cards, but on the flip side, it might actually be working for them. How many are too many credit cards?
Generally, having multiple credit cards can be beneficial for your credit score as long as you use them responsibly and pay your balances on time. However, having too many credit cards can also be a potential issue, especially if you have trouble keeping up with payments or managing your debt. Here are some factors to consider when deciding how many credit cards to have.
If you’re organized, then it’s not a problem.
If you have trouble keeping track of multiple credit card payments, it might be best to stick to just one or two cards. But if you’re extremely organized and know when payments are due or have autopay set up on each card, then it’s probably fine to have quite a few credit cards.
One thing to keep in mind is the risk that you end up spending outside of your budget because you’re not able to track your spending on all of your outstanding cards. That said, if you’re organized and diligent, you can still make it work. A good practice is to know your own ability to manage payments and be honest with yourself about how much on your A game you really are.
Too many cards both hurt and help your credit score.
We know - it’s confusing. On the one hand, opening too many new credit card accounts in a short period of time can negatively impact your credit score. But at the same time, if you have a lot of credit cards and only spend a little bit on each, you have a low credit utilization which helps your credit score. It’s a balance, so it’s best to not let your credit score be the deciding factor when you’re deciding between having 13 vs 14 credit cards.
The true costs of having lots of credit cards.
Be wary of those pesky annual fees! Those can add up really quickly. It’s important to stay organized and cancel cards before their annual fee is charged if you noticed you haven’t really used it. One of the main reasons to use credit cards is the rewards or benefits. When you have multiple credit cards, it’s really hard to maximize the value you’re getting from each one. Unless you’re really organized, it’s hard to remember where you’ve accumulated points and at what thresholds you can use them.
As a general rule, it's a good idea to have no more than four or five credit cards. However, the number of credit cards that are right for you will depend on your individual financial situation and your ability to manage multiple accounts.
Peach out ✌️
