How Many Credit Cards Should I Have?  

Young man sitting at the cafe and paying online with credit card

How many credit cards should you have? There’s no magic number, and the answer will differ for each person, but as your finances and spending change so will your credit card needs.

Reasons to have (or not to have) multiple credit cards

The answer varies based on your needs and individual situation, but for many consumers, it’s beneficial to have multiple credit cards. Let’s look at some of the reasons financially empowered Americans may choose to have more than one credit card. 

Many credit cards offer benefits or perks to cardholders. Some cards offer cash back, rewards points, or airline miles; others may provide unique benefits for overseas travel.  

Other cards have unique features that benefit you when you use them in certain ways. The Prosper® Card offers ATM withdrawals with no additional fees for flexibility in how you use your credit.1 There are store cards that provide you other benefits when shopping at your favorite stores.  

If you gain a benefit from using a card, that’s something to keep in mind. However, consider whether you actually use your cardholder benefits regularly or plan to do so in the future.  

Many cards, especially those with rewards programs or benefits, charge an annual fee. If you’re paying to use a card and not taking advantage of its benefits, that’s a good account to consider closing. 

Multiple credit cards and your credit score

Your credit score sums up your credit history as a single, easily digestible number that impacts almost every aspect of your life.  

Here are the factors that constitute your credit score, and how having multiple credit cards influences several of them.

Credit Utilization

One major factor in your credit score is your debt-to-credit ratio. This is also known as your credit utilization rate and is the amount of debt you have in relation to your credit limits.  

To figure out your credit utilization: 

  • Add up all your revolving balances from credit cards and other revolving credit accounts, such as a HELOC 
  • Add up all of your credit limits 
  • Divide the sum of your balances (from step 1) by the sum of your credit limits (from step 2) 
  • Multiply the total number (from step 3) by 100, and you’ll get the percentage of your credit utilization 

For example, if you only have one credit card (and no other revolving credit) with a credit limit of $1,000, if your balance is $500, your utilization ratio would be 50%. 

Your credit utilization is a significant factor in your credit score because many vendors view using a large percentage of your credit as a sign of potential financial stress.  

Experts advise keeping your credit utilization ratio below 30%, and the lower it is, the better off your credit score will be.  

One advantage of having multiple credit cards, if you don’t use the available credit, is that it can benefit your utilization ratio by increasing the credit available to you.

Credit age 

Lenders prize stability and longevity in potential borrowers as this helps prove your creditworthiness.  

The average age of your credit accounts, or how long they’ve been open, is a factor in your credit score. This means opening a lot of new credit accounts quickly can lower your score.

Payment history 

The single largest variable in your credit score is your payment history. When you’re juggling a lot of cards, it’s easy to miss a payment due date.  

When asking how many credit cards you should have, make sure you keep and use only as many cards as you can keep track of.  

Automatic payments help, but it’s still a good idea to check your credit card account to ensure your payment went through and avoid a late fee.

Credit mix 

Another factor in your credit score is the type of credit you use. A healthy credit mix where you create a balance between revolving credit (credit cards and lines of credit) and installment loans (home equity loans, mortgages, car loans, and personal loans) can help boost your score.

Dealing with fraud 

Credit card companies monitor accounts for potentially fraudulent activity and shut a card down if they detect potential fraud, such as purchases outside your usual pattern, suspicious online purchases, or purchases made in dispersed geographic areas in a short timeframe.  

While this is generally easily cleared up with a phone call or using the credit card app, it can be inconvenient when you depend on a single card while traveling.  

A second credit card can be handy as a backup, especially if there is fraudulent activity and they have to issue a replacement for your primary card.  

However, having too many cards may increase your vulnerability to fraud. While most credit cards have robust anti-fraud protection and limited fraud liability, a compromised card can still cause a major hassle. 

Opening new credit cards

When you apply for a new credit card, the lender performs what is known as a ‘hard inquiry,’ which goes on your credit report.  

Since applying for multiple new loans or credit cards in a short period of time can be a sign of financial distress, this can negatively affect your score.  

While it’s usually a short-term drop in your credit score, according to the Consumer Financial Protection Bureau (CFPB), it’s best not to apply for or open new credit accounts while buying a house.

So, how many credit cards should you have?

As many as you need, depending on your spending habits and finances. Once you’ve considered your credit score (and history) and credit card usage, you’ll find the number of credit cards that work best for you. 

If you’re looking for a solid credit card to round out your portfolio, check out the Prosper® Card! In addition to the flexibility of having no ATM withdrawal fee1, the Prosper card waives your annual fee2 for the first year if you sign up for AutoPay, and Prosper reviews your account automatically for possible credit line increases.3 

Read more:

The Prosper® Credit Card is an unsecured credit card issued by Coastal Community Bank, Member FDIC, pursuant to license by MasterCard® International. 

1Third party atm fees may apply. 

2The annual fee for this credit card is $39, which will be waived for your first year if you are approved and sign up for AutoPay before we issue your first statement.  

3Automatic credit line increases: Your account will be reviewed automatically for credit line adjustments. Your credit line can increase or decrease, or not change at all, depending on your payment history and eligibility. 

The Prosper® Card cannot be used for balance transfers. 


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