credit cards

Yes, you can have too many credit cards

Walter Cavanagh and his credit cards | Stephen Osman/Los Angeles Times/Getty Images

There can be many advantages to opening a new credit card: rewards, airline miles, a larger line of credit. But, what would happen if you just kept opening one card after another, after another, after another?

California resident Walter Cavanagh was recently entered into the Guinness Book of Records for having the most credit cards in his name -- a whopping 1,497. Cavanagh's story went viral almost instantly, but experts caution against giving in to the urge to buy a bigger wallet for your new credit card collection. (Cavanagh owns the record for biggest wallet, too.)

"This is so far outside the norm, so people are fascinated and wonder if (they) should go out and do it," says Beverly Harzog, credit card expert and author of "The Debt Escape Plan."

The answer, she says, is "absolutely not."

Keeping track of what you owe

One of the best ways to keep your finances healthy is to track what you spend and when bills are due, a task that would be infinitely more complicated with the number of credits cards Cavanagh -- or "Mr. Plastic Fantastic" as Guinness calls him -- owns.

"I would never recommend anybody have 1,500 credit cards," Harzog said, "It would be a full-time job just to keep up with them."

How many credit cards to have is one of the most common questions experts get asked, says Bruce McClary, vice president of public relations and external affairs with the National Foundation for Credit Counseling.

"Having more than a couple of credit cards is not what I would recommend for most people," McClary says. "There are so many people out there carrying debt on their credit cards from month to month so there's no reason to add more."

For people with more than a few cards, Harzog recommends keeping spreadsheets to track when the cards are used, when the payments are due and any annual fees you may incur.

"There's no magic number for the right number of cards, but you don't want to get into a situation where you can't keep track of things," Harzog says. "Have as many cards as you personally need and as many as you can personally keep track of."

More cards, more chances for fraud

When you have too many cards, you become that much more of a target for someone to try to steal your identity or commit fraud with your money.

Harzog says that people should check all of their accounts frequently -- once a day to once a week -- to make sure there are no fraudulent charges. That task becomes more daunting the more accounts you have.

The environment is getting even riskier because hackers are getting more tech-savvy about stealing people's information, McClary says.

That's why people should try to minimize how many different places have their information, including credit card companies big and small.

"The more accounts you have the better the odds are that one of those accounts might end up getting compromised," McClary says. "An unused account sitting for too long, especially if it is sitting unmonitored, is easy prey for identity theft or credit card fraud."

And if fraud does happen to an account where you aren't paying attention, you may not catch it in time to recuperate the lost money.

More credit, more spending?

With all of the cards he's opened, Cavanagh has lined up an impress $1.7 million credit line, but that doesn't mean he should go on a shopping spree he can't afford to pay off. (And, to his credit, Cavanagh reportedly only uses one of those cards and pays it off monthly.)

Opening credit for the sake of being able to spend outside your means is never a good idea, experts say.

Not only will you wind up in trouble when the bills come due and interest charges start racking up, but your credit score will take a hit, too. Check your credit score for free now with myBankrate.

FICO keeps track your credit-utilization ratio -- or how much of your available credit you've used. "The ratio goes up, your score goes down," Harzog says.

Maxing out every credit card you have open will bring down your credit score, Harzog says, which could hurt your ability to buy a home, car or make other big purchases for years to come.

Not all bad news

Credit doesn't have to be an all or nothing situation, though. Just because it's not a good idea to have more credit cards than days in the year, doesn't mean opening a new card is never a good idea.

Just make sure to shop competitively, read the fine print and make sure you can handle the payments. Ready to get a new credit card now? Let help you choose the right card for you.

"It's easy for people to apply for more credit than they can handle or be enticed by the offers," McClary says. "But people need to curb their appetite for credit and manage the debt they already have."


Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

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