Can Having Too Many Credit Cards Affect Your Credit Score?

Can Having Too Many Credit Cards Affect Your Credit Score?

Q: Can Having Too Many Credit Cards Affect Your Credit Score?

A: Actually, it can.

Each card that you have applied for and your application was accepted shows as an “open account” on your credit report. It doesn’t matter if you have not charged the first dollar. It is still considered that way.

You might be thinking that showing proof that you have been given so many cards is an indication that you are a good credit risk. Again, it isn’t.

Lenders don’t look for things like that. Instead, they look for things like timely payments, how many loans are paid off, and debt-to-income ratio when deciding whether or not to loan you money.

The best thing to do is to pick one or at the most two of the cards that have either the lowest balance or no balance at all. Then compare the interest rates on both cards and see which one is the best. After you have done that, then and only then look for other advantages such as rewards points for using the card, because a low interest rate is most important.

Notify the other credit card companies that you are closing your account, and cut up all remaining cards.

Note for card hackers: 

If you use multiple rewards cards to always try to maximize your return on spending, you may want to limit yourself. Even if you always pay your bills in full, too many cards can hurt your credit score.

But how many cards is too many?

There are no hard or fast rules on this, but you may want to limit yourself to no more than seven open credit card accounts at one time.

And, really, that should be more than enough cards for you to hack to the sheep come home.

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