How many credit cards should you have? – Robb report


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Is your wallet as skinny as your jeans or full of seams?

There is no right answer as to how many credit cards a person should have. In 2020, the average American held just under four credit cards, according to Experian, one of America’s top three credit bureaus. But a person’s age, financial situation, and long-term goals can all play a role in determining the right number of credit cards.

Is one credit card enough?

Credit cards are handy for shopping online or buying expensive items like a media room or a fully equipped garage. Many credit cards also offer perks such as travel rewards or cash back rewards that encourage using the card to make purchases. You don’t need multiple cards to take advantage of these benefits if you find one that suits your needs.

Having just one credit card can work well for anyone who wants to start building credit, including students or new citizens, or for someone who doesn’t want to keep track of reward balances on multiple cards and has the ability and need to put thousands or tens of thousands of dollars on a card each month. A credit card that offers cash back for everyday purchases like gas or groceries is a good place to start, but it’s not enough if you want or need more perks or perks. elaborate, such as access to the luxury lounge at the airport or a concierge service.

Related: The best credit cards of 2021

What is the correct number of credit cards?

The number of credit cards you should have depends on your ability to benefit from cards with different rewards options, while managing your finances responsibly.

Two to five cards in anyone’s wallet are usually enough to cover the basics. Cardholders should strategize by requesting cards that offer different benefits. In this way, the cardholder can maximize the potential for savings.

Consider a strategy in which you hold:

  • A card that offers bonus rewards on travel
  • One to eat
  • The one that offers a high cash back rate for all other purchases

Of course, the right combination of cards depends on your spending habits, your savings goals and your financial situation.

In addition to enjoying various rewards or welcome bonuses, which provide you with a one-time cashback or points rebate after spending a required amount of money within a few months of opening the card, doing so Having more than one card offers another particularly important benefit: It can help you increase your credit score.

Here’s how. The FICO score, which is the most used credit score, takes into account the amount of available credit you are using to determine your score. That’s why it’s a good idea to keep your so-called low credit usage, both overall and on individual cards.

FICO recommends that you keep your credit utilization rate (how much of the credit line is used divided by the total amount available) below 30%. The larger the line of credit, the less likely a cardholder is to exceed 30%. The key is to pay off your balance in full and on time each month to avoid accumulating interest and getting into debt.

How many credit cards is too much?

When deciding which credit cards to apply for (and how much), it’s important to think about how easy it will be to keep up with monthly payments. If you tend to forget to pay your bills on time or just can’t afford more than one monthly payment, having multiple credit cards can be a bad idea.

Paying off all card balances each month remains the key to maintaining a good credit score (payment history is 35% of the FICO score formula), avoiding high interest charges, or falling into a cycle of indebtedness. The annual fee also adds up and isn’t worth paying if the card doesn’t give you a big enough benefit to offset the fees. Also, the more cards you have, the less likely you are to fully utilize all the benefits of all the cards.

Final result

Deciding how many cards to own and determining the best cards to apply for is entirely dependent on your spending habits, long-term goals, potential rewards, and even your age. When trying to accumulate credit for the first time, start with a single credit card to get used to paying a bill each month and receiving basic rewards. A credit card that offers cash back for everyday purchases is usually a good place to start.

When you’re ready to move on, consider upgrading to a card with greater benefits, but remember not to ask for too much within 12-24 months as it could lower your credit score. and send a warning signal to other potentials. lenders.


Chauncey Crail’s work covering film, art, travel, personal finance, healthcare, automotive, aviation, home improvement, small business and other topics has been published by various media, including Forbes Advisor, Investopedia, Rolling Stone and Robb Report, among other publications.


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