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Could I apply for a new credit card while I already have several ones? Multiple credit cards can bring you many benefits. However, having too many cards can still hurt your credit. So, how many credit cards should I have? Here is the answer from Hanfincal.

1. Is it good to have multiple credit cards?

Having multiple credit cards will bring you more advantages if you manage your credit wisely, keep track of payment due dates, and keep your credit line utilization ratio below 30%. The benefits you should not overlook:

  • The fastest way to build your credit score.
  • Different rewards such as miles and points.
  • Security if another card is compromised, lost or stolen.
  • Convenience if a merchant only accepts one type of card,
  • More credit for non-essential spending.

However, having more than one credit card can become a liability if you don’t keep track of your spending. More credit and increased convenience may result in missed payments, rising debt, and a lower credit score.

2. How many credit cards are too many or too few?

Too few credit cards, also called a “thin file,” are defined as having four or fewer accounts. Having a small number of accounts can make it difficult for scoring models to generate a score for you. It is more difficult to achieve a high score with a thin file than a fatter one, and lenders may view thin files as riskier.

There is no specific number of credit cards that are considered too many. However, you should apply for and carry only the cards you require and can justify using based on your credit score, rewards goals, and ability to pay balances. In some cases, even having two credit cards can be excessive if you can’t afford to pay your bills, don’t need them, or don’t intend to use them.

3. How many credit cards should you have? 

There is no perfect answer for how many credit cards should I have. The number of these cards you should have is determined by your personal financial situation and spending habits. In general, credit bureaus suggest that five or more accounts — a mix of cards and loans — are a reasonable number to aim for overtime. It is ideal if each card is from a different network, such as Visa, American Express, Mastercard, or Discover.

4. What to consider when opening credit cards?

When applying for credit cards, you should consider the following nine factors:

  • Personal needs and requirements: This will also assist you in selecting the appropriate type of card for your needs.
  • Multiple networks: If a merchant does not accept Visa or Mastercard, multiple networks can help you.
  • One-time offers and benefits: In the long run, these flash sales will no longer benefit you, and the card will only add to your financial woes.
  • Emergency solutions: An extra credit card can be a lifesaver in a pinch.
  • Credit score: A high credit score is required to apply for and be approved for a credit card.
  • Many types of rewards: Check to see if your credit cards have overlapping rewards.
  • Your repayment capacity: This will give you an idea of the maximum number of credit cards that are appropriate for you.
  • Additional responsibilities: Aside from arranging the repayment funds, you need to remember the due date for each card, the expiry date of the reward points, the card renewal date, etc.
  • Introductory rewards: If you apply for another one solely for the attractive introductory offers, this can hurt your financial health.
What to consider when opening credit cards?

What to consider when opening credit cards?

5. Potential issues when having multiple credit cards

5.1. Monitor multiple billing cycles

The more cards, the more due dates and credit limits you must remember. As a result, if you do not have a good strategy for remembering all of the necessary information, you are more likely to miss or make late payments.

One solution is to automate monthly payments, change your due dates to the same day, or align with paydays to ensure that you pay your balance fully.

5.2. Have to impact on credit score

The three following factors have a significant impact on credit scores when you have multiple credit cards:

  • Your payment record: Your payment history accounts for approximately 35 to 40% of your credit score; paying on time is far more critical than the number of cards. Having a lot of credit cards can make it difficult to remember all of the due dates.
  • Utilization of credit: Keeping your balances under 30% of your credit limit helps you maximize your score, and lower is better. Opening new credit cards may improve your credit score by increasing your total credit limit.
  • Your credit history: A long and stable credit history is more appealing than a short or new one. Your credit score is considered the average age of all of your credit cards.

6. What to do if you have too many credit cards?

You are more likely to overspend and accumulate debt if you have too many credit cards. Maintain a low credit utilization rate (an amount you owed, which is the percentage of your total credit used. These various credit cards may be used for multiple expenses, but it is critical to ensure that the balances are paid by the statement date to protect your credit score.

Have you determined how many credit cards should I have based on this article? The number of credit cards you choose depends on your financial situation and needs. Having only one credit card with a good payment history and credit score is preferable to having too many but missing payments and piling up debt. Please share your thoughts with Hanfincal so that we can work together to find the best solution for you.

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