Stack of credit cards
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With so many great credit card options on the market, it can be daunting to narrow down the choices to fill the few open slots in your wallet’s cardholder.

Maybe you’re looking to score a great sign up bonus. Or your rewards don’t align with the categories you purchase most. You may even want to eliminate your balances on other cards by completing a balance transfer. But do you really need a card for everything? How many is too many?

There’s no magic number that works for everyone, but you can find your own by curating a collection of credit cards that work best for you. Here are some things to consider when choosing your cards:

What is the ideal amount of cards for a great credit score?

If you’re working with a low credit score or no credit history, look for cards you can qualify for to begin building a healthy credit history. Start small; before taking on multiple cards, build a solid history of timely payments in full and keep your balances low. This can help you raise your score and qualify for more cards at better rates.

You don’t need a specific number of cards for a great credit score; instead, focus on building your solid history of timely payments, keeping your credit utilization rate low and minimizing your debt-to-income ratio.

Use more than one card to keep balances low

More open card accounts means more credit available to you, so multiple cards may make it easier to keep your credit utilization rate, or the amount of credit you’re using versus what you have available, low. You should keep your utilization under 30 percent but it’s smart to aim for around 10 percent.

Scoring systems often account for both your credit utilization rate on individual cards and your overall rate for all accounts. That means that multiple credit cards can be helpful for your overall utilization, but no matter how many cards you have, you should stay aware of what you’re spending on each one. Don’t fall into a trap of spending more just because you have more credit available.

How multiple cards may lower your score

When you apply for a new card, your credit score may experience a temporary drop due to the hard credit check your issuer makes on your report and because a new account will lower your average age of accounts.

If you’re looking to take out a loan in the near future, especially a long-term loan like a mortgage or auto loan, you should hold off on opening any new credit cards. Even docking just a few points from your score could impact your rate, affecting your payoff for the lifetime of the loan.

More benefits of multiple credit cards

The key to using credit responsibly is figuring out a system that works for you. If you have one credit card that meets your needs and adding to the mix would cause you to fall behind on payments, then you should stick with what works for you.

Diversifying with multiple credit cards, however, can be useful for you long-term, through maximized rewards, alternative networks and issuer perks.

Diversify card networks

If you have multiple cards all on one network (for example, two American Express cards or three Mastercards), you could run into trouble at the register.

Not all merchants accept each of the four card networks, made up of Visa, Mastercard, American Express and Discover, and having just one card or all your cards on one network may complicate your purchase.

Traveling abroad with your credit cards can be tricky too, since not all foreign merchants accept card networks available in the United States. Diversifying your wallet with more than one network can give you options at the register and save you from being stuck without payment in another country or forced to pay hefty foreign ATM fees.

Maximize rewards

Using multiple credit cards with varying rewards structures gives you the ability to personalize rewards to ensure they best fit your spending habits.

If your first credit card earns high rewards on groceries and gas, for example, but you also travel regularly throughout the year and like to eat out on the weekends, opening both a travel rewards card and a card with restaurant rewards can help you maximize each of your highest-spend categories.

Take time to sort through your statements and receipts from the past several months to get an idea of the areas in which your spending is focused, then match your most-shopped categories to a card (or multiple cards) with those rewards. Just be careful not to apply for too many cards within a short time period; space out your applications so you leave your credit score minimally affected and you’ll have enough time to earn each sign up bonus.

Debt payoff

Another important reason you may want to open a new credit card is to speed up your debt payoff with a balance transfer.

If you already have a decent credit score but you’ve racked up debt on your existing cards, look for an introductory zero percent interest balance transfer offer to kick-start your payoff journey. Introductory periods generally last between 12 and 21 months and the cards often come with a balance transfer fee of around 3 percent.

Say, for example, you’re carrying $5,000 in credit card debt. If you open a balance transfer card with an 18 month introductory period and a 3 percent balance transfer fee, you can pay off your balance in full without accumulating more interest by making payments of just over $286 per month.

Can you have too many credit cards?

Just as there’s no perfect number of cards you should carry in your wallet, there’s no predetermined number that will push you over the edge to owning too many. The perfect amount for you is the number of credit cards that suits your needs and doesn’t hinder you from paying off balances each month.

If you find yourself collecting multiple cards and on the verge of missing payment deadlines, scale back the number of cards you’re carrying regularly until you find a happy medium.

Also remember that you don’t have to close a card if it’s no longer working for you. If you’re not paying an annual fee, you can simply store the card away at home; if it is an annual fee card, you can call your issuer to ask for a product change to one without the fee.

Bottom line

Everyone’s experience with credit cards is different and it may take time to find the perfect fit for you.

Start building your credit with one card, then determine which rewards will best fit with your spending, work to diversify your card networks and pay off any debts. And keep in mind that you will only save with rewards if you’re diligent about paying your balances in full each month, so be careful not to take on more accounts than you can handle.