There is no magic number of credit cards that you should have, but there are several factors to consider when thinking about your credit card portfolio.

  1. Do you have issues managing your spending?  If so, you may want to live life without any credit cards at all.  Using cash is the only sure way to avoid debt.
  2. Your Credit Score.  If you are planning to expand the number of credit cards that you have, don’t apply for multiple cards at the same time.  This can be a negative signal to the credit bureaus.  But having a number of cards isn’t, in and of itself, a problem for your credit score as long as you pay your bills on time and don’t max them all out.
  3. Your ability to manage multiple accounts.  The more credit cards you have, the more likely you are to let a payment deadline fall through the cracks.

Multiple Credit Cards

If you do decide that you want multiple cards, what’s a good mix?  Some people have numerous cards with different rewards programs and decide which card to use based on the rewards.  For example, they may put all of their gas purchases on the card that has a bonus reward for gas that quarter and all of their groceries on another card, etc.  This can be a fun game and a good way to rack up rewards, but it can all be too much to keep track of.  Miss one payment and the penalties and interest will quickly wipe out any benefit of juggling a bunch of cards.

 Two Credit Cards

Having two cards is not a bad idea.  One strategy is to have a rewards card and a low interest card for large purchases that you play to pay off over time.  Alternatively, choose two different types of rewards cards such as an airline miles card and a cash back card. If you redeem those miles for a trip overseas, you may want to add a card with no foreign transaction fees into your mix. Personally, I have two cards – one that I keep in my wallet and the other is in my desk drawer where it can be conveniently pulled out to use for online purchases.

 One Credit Card

Keeping just one card has its advantages.  You’ll have a single bill to pay, and although you can still overspend, you certainly can’t spend as much as you would with a wallet full of cards.   And, as opposed to having no credit cards at all, you’ll be building a credit history which will come in handy when it is time to get a home or auto loan.

No Credit Cards

Finally, having no credit cards at all is always an option.  This doesn’t mean that you have to forego the convenience of a card altogether, but make it a debit card instead.  If you have the self-discipline, you could consider having a credit card to use in case of an emergency only such as a major car repair or medical expenses.  Just make sure you don’t start consider a shopping spree or vacation an emergency.

Leave a comment