How many credit cards is too many?

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There are plenty of reasons to keep signing up for new rewards credit cards, and that’s true even if you already love the ones you have. After all, credit card issuers are constantly rolling out new offers, including new credit cards with generous bonuses you can earn. Then there are spending incentives and changing benefits that can make older cards more attractive than they were before.

But, you may encounter a problem if you keep on adding new credit cards year after year. If you use multiple cards for purchases in order to maximize bonus rewards categories with each one, for example, you may have trouble keeping track of your spending and all the different bills. Not only that, but too many credit cards can mean more annual fees and benefits to keep track of and use.

How many credit cards is too many? And is it possible to have several cards (or dozens of credit cards) without harming your finances?

If you’re wondering whether the number of credit cards you have is normal, keep reading to learn more.

Is there such a thing as too many credit cards?

There may or may not be such a thing as “too many” credit cards. At the end of the day, the right number of cards can vary for different people based on their personality and preferences.

If you are “Type A” and incredibly organized, for example, you may be able to have 10 or more credit cards and keep track of their benefits, fees and payments without any problem. If you travel all the time and maximize travel credit cards like it’s your part-time job, then having an array of credit cards with different perks could even be incredibly lucrative.

Then again, it’s easy to become overwhelmed with different credit card earning rates, rewards programs, fees and payment due dates. In that case, you may realize you’ve reached your limit once you begin getting your cards and payments confused, or when you can no longer keep track of the perks each one offers.

How many credit cards should you have?

You’re probably wondering how many credit cards is too many, yet this is a conclusion you’ll likely have to reach on your own. You may find you’re someone who only has the time and bandwidth to keep track of one credit card at a time, but if you’re a hobbyist, there may be no limit to the number of cards you can manage without a problem.

How many cards you should have should depend on the following factors:

  • How comfortable you are paying credit card annual fees, and if you’re getting significant value in return for the investment
  • The number of cards you can reasonably use for purchases on a regular basis
  • The cardholder perks you can get with each one without paying for redundant benefits
  • The type of rewards you want to earn and whether you want to earn more than one type of rewards currency

At the end of the day, someone who wants to rack up travel rewards in a bunch of different loyalty programs may benefit from juggling multiple credit cards. If you just want to earn cash back without an annual fee, on the other hand, then settling on a single cash back credit card with the highest rewards rate is your best bet. Only you can decide how many credit cards you need, how many you can handle and how many you actually want to deal with.

Does the number of credit cards you own impact your credit score?

The number of credit cards you have could potentially cause damage to your credit score at first, yet the impact of credit card sign-ups isn’t long-lasting. When you apply for a credit card and a hard inquiry is placed on your credit report, you may see a temporary drop in your credit score that shouldn’t last for more than a few months.

Fortunately, the most important factors that make up your FICO score are ones you can control regardless of how many credit cards you have. For example, your payment history makes up 35 percent of your FICO score, and you can get the best results in this category by paying all your credit card bills early or on time.

The second most important factor that makes up your FICO score is the amount of debt you have in relation to your credit limits, or your credit utilization. This factor makes up 30 percent of your FICO score, and you can do well in this category just by keeping your debt levels low. Generally speaking, experts suggest keeping your utilization below 30 percent of your total credit for the best results.

Benefits of multiple credit cards

Why would anyone want multiple credit cards in the first place? That really depends on a person’s goals and what they are hoping to accomplish with credit.

Keep reading for some of the perks you can get if you’re willing to juggle multiple credit cards.

Diversity in card networks

Some consumers like to carry credit cards from different issuers or different card networks for the sole purpose of diversification. If you’re traveling overseas and your Chase credit card stops working, for example, it might be nice to have a card from another issuer like American Express or Discover to use until you have time to call Chase and inquire about the issue.

Also, note that cards from different networks can come with unique core benefits that don’t always overlap. For example, some consumers prefer to have a World Elite Mastercard due to perks like discounts with Lyft, rewards with Boxed.com or access to Priceless Golf. Meanwhile, they might also want a Visa Signature card due to benefits like roadside dispatch, extended warranties and emergency cash disbursement.

Ability to maximize rewards

Having more than one rewards credit card can also help you boost the number of points you earn overtime. This is due to the many sign-up bonuses you can earn with multiple rewards credit cards, but it’s also based on the fact that different cards come with different earning rates.

For example, you might use one credit card for grocery purchases due to its exceptional rate in that category then use another that offers more points on regular purchases. If you also spend a lot on hotels and airfare, having a separate card that offers bonus points on travel purchases can also make sense.

Help with debt payoff

In some cases, you might get another credit card to help you pay off debt with the others. If you managed to rack up balances you can’t afford to pay off, for example, you might sign up for a balance transfer credit card that offers a 0 percent APR for a limited time. In this scenario, you would transfer balances from your old cards to your new one and pay off as much debt as you can during the zero-interest period.

Just remember that if you sign up for a new 0 percent APR credit card to help you out of debt, you’ll want to stop using your credit cards for purchases while you focus on your plan.

What to do if you have too many credit cards

If you are finding you have more credit cards than you really need or want, you have plenty of options to consider. However, the best step to take can depend on why you believe you have more cards than you can handle.

The following chart explains some of your options based on your reasoning for having too many cards:

Reason you have too many credit cards Options to consider
You’re paying too many credit card annual fees Cancel your credit cards by calling the number on the back of your card.

Call your card issuer and ask to downgrade your card to a no-fee version.

You’re struggling to keep track of charges and payments Cancel your credit cards by calling the number on the back of your card.

Limit yourself to using one or two credit cards for purchases.

You keep racking up debt you can’t afford to pay off Stop using your credit cards for purchases.

Transfer balances with a 0 percent APR credit card.

You can’t seem to keep track of your credit card perks and benefits Create a spreadsheet that helps you keep track of credit card perks.

Pick your favorite credit cards and stop using (or cancel) the rest.

Things to consider before applying for more credit cards

If you’re on the fence about signing up for a new credit card because you already have several, there are a few important factors to keep in mind. First, as we mentioned already, applying for a new credit card will add a hard inquiry to your credit report. This could cause your score to drop in the short-term, so you should be prepared.

Also, be sure cards that charge an annual fee will be worth it. For starters, make sure the first-year welcome bonus and cardholder perks are worth considerably more than the annual fee. If you’re not positive you’ll keep the card for the long haul, you can also set a calendar reminder around the 11-month mark to make sure you assess whether you should keep the card for another year.

Finally, ask yourself why you’re signing up for a new credit card. If you keep racking up balances you can’t afford to pay off, then adding another credit card to the mix could be the last thing you need. One exception would be signing up for a balance transfer credit card with a 0 percent APR, but then again, this will only help you if you get serious about debt payoff and stop using credit cards for purchases.

The bottom line

Each person’s experience with credit cards can be different, and the right number of cards for one person can be drastically different from another. For that reason, you may need to do some experimenting to find the ideal number and combination of credit cards for your needs.

Start with one credit card and don’t be afraid to branch out but make sure you’re ready to put on the brakes when you feel you’ve hit your max. At the end of the day, the best credit card situation is one where you’re maximizing rewards and perks without overcomplicating your finances.