How Many Credit Cards Should You Have?

How many credit cards should you have?

Set of color credit cards on wooden table

How many credit cards should you have? There is no one size fits all answer to this question. If you have a lot of debt that you are trying to pay off, or if you struggle to keep a strict budget, then the answer in your case is to have zero credit cards. However, if you have your finances in order, and you want to take advantage of rewards, then you may be able to have and manage multiple cards. So, how many credit cards should you have? Let’s take a look.

Some Averages

The average American has four credit cards. That’s not necessarily good or bad. Those are just raw statistics. Residents of New Jersey have the most cards with an average of 4.1. The state with the fewest? Alaska with an average of 2.8. Interestingly Alaska also has the highest average credit card debt sitting at just over $8000. The national average is around $6100. The lowest average credit card debt? That honor goes to Iowa at $4700.

Some Things to Consider Before Opening a New Card

Opening a new credit card can be beneficial if you are a responsible card holder and would like to increase rewards or cash back. Managing multiple cards can be a bit complex to some, but if you are to do it, and you pay off your balance every month, then feel free to open as many cards as you deem beneficial.

Doing a balance transfer can help you get out of debt faster if you have a card that you are trying tp pay off. Transferring to a 0% interest card might make sense in your situation. Here are some of the best current balance transfer offers.

If rewards are your thing, then having multiple cards to take advantage of simultaneous rewards can be a good financial strategy. If you travel, then you may want a card to rack up airline miles, another to earn free hotel stays, and a third to save on fuel or dining. Some of the best rewards related cards can be found here.

If you are trying to improve your credit score, then keep in mind that opening a new credit card will ding your score about 5 points. Minimal, but still something to consider.

There is no limit to the number of cards that you can have, but an individual will only qualify for so much credit. Eventually, a creditor is going to cut you off if you keep opening cards. You will have to take it upon yourself to exercise some self-control and set your own limits. There may also be policies whereby people will be limited to the number of accounts that they can open in a given time frame. The 5/24 rule instituted by Chase is an example. The rule states that no one can apply for more than 5 cards in a 24-month period. The rule was designed to keep credit card “churners” away. Churners sign up for cards with sign on bonuses and then quickly close out the accounts once the rewards are redeemed.

The Bottom Line

So, how many credit cards should you have? There is no one size fits all answer. If you are trying to get out of debt and are bad at budgeting, then I’d advise have zero credit cards. For those with their finances in order and who want to keep things simple, then choose a card with rewards that you enjoy and stick with one card. Maybe you are a reward’s junky and can handle managing multiple accounts. In this case the sky is the limit. Open as many cards as you want to. The point is to only open as many cards as you are comfortable with and can effectively manage.

Read Also:

How to Lower Your Credit Card Interest Rate

Credit Card Reward Stacking

5 Tips On How To Avoid Growing Your Credit Card Debt

Coronavirus Credit Card Relief Programs

Speak Your Mind

*