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How Many Credit Cards Should I Have?

Tamsen Butler
Close up of stack of credit cards

The ideal number of credit cards (both bank cards and retail cards) for people varies depending upon each person's financial situation and goals. The number of credit cards in your wallet can have an impact on your credit score - both positively and negatively - whether you actually use the cards or not.

Life Stage: Building Credit

It may be tempting to get approved for as many credit cards as possible when first attempting to build credit, but that's not necessarily the best plan. Too much credit too fast can have a negative impact on your credit report and score as potential lenders worry that you may not know how to handle the new accounts properly.

Secured and Unsecured Cards

The experts at CreditCards.com suggest people in the life stage of building or rebuilding credit should have two credit cards: a secured card, and then when you've built your credit enough to get approved, obtain an unsecured card.

It's important to note that while secured cards are typically secured by a cash deposit, they bring with them interest rates that are usually higher than comparable unsecured cards. For that reason, it's important to move on to an unsecured card responsibly, especially if you carry a balance.

Life Stage: Improving Credit Score

Those who are in the process of improving their credit score in an attempt to get a better interest rate for a mortgage, auto loan, or to make applying for a lease or insurance easier should stick with whatever number of credit cards they already have, advises Nerd Wallet.

  • Closing credit card accounts can have a temporarily detrimental effect your credit score as the amount of available credit you have drops.
  • Opening new credit card accounts grants you more available credit (and, consequently, more potential debt) and can pause a home loan process, even if it has already been approved.

Making Abrupt Changes May Backfire

Using the opening or closing of credit card accounts in an attempt to improve your credit score quickly can backfire, even if your intentions are to have less debt.

Life Stage: Reducing Debt

If you want to reduce your debt, it's best to have as few credit cards as possible. Consumer credit expert Dave Ramsey is in favor of zero credit cards, instead urging people to utilize debit cards and cash. Ramsey advises against keeping a credit card, even for emergencies, as it's simply too easy to get into debt with access to credit.

Closing Accounts

Note that closing credit card accounts may cause a small dip in your credit score temporarily since it reduces the amount of available credit but if your main goal is to reduce the amount of money you owe, less credit is a better option.

Life Stage: Average Consumer

The average American consumer has 2.35 credit cards. These consumers also have an average balance of around $5,500, though, so sometimes being "average" isn't ideal.

No Magic Number

Credit Karma stresses there is no magic, ideal number of credit cards. Instead, consumers should strive to manage the credit cards they have responsibly, maximizing rewards while not allowing balances (and interest charges) to linger.

Life Stage: Heading Into Retirement

Even if the mortgage is paid off and a substantial retirement account is in place, Nerd Wallet advises against retirees closing all their credit card accounts. Credit scores determine so much more than credit approval (insurance rates, rental agreements, employment), but it's impossible to tell if a retiree might need credit in the future for unexpected expenses or to co-sign for a family member on a loan. That's why retirees shouldn't abruptly close all their credit cards; instead, keep accounts active by either using them periodically for everyday purchases or by setting up automatic payments (such as utilities) with the cards and then paying them off every statement cycle.

Responsible Use

A person who has a difficult time managing credit should have as few credit cards as possible to avoid racking up balances, while a person who makes a game of effectively maximizing rewards should have at least two credit cards (each offering different perks from the other).

The Right Number of Cards

Credit.com suggests that the right number of credit cards is the number that is most effectively managed by the cardholder, making this a highly individualized number. No one should have so many cards that they lose track of statement cycles and payments, and for some people, zero credit cards is ideal for their life situation.

How Many Credit Cards Should I Have?