How Many Credit Cards Should You Have For Good Credit | CreditShout

How Many Credit Cards Should You Have For Good Credit

How Many Credit Cards Should You Have For Good Credit


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According to Transunion, the average American owns 2-3 credit cards. In a recently released article, Credit Karma stated their members have an average of 4-5 credit cards.

While these responses can give us a path to follow, are they right? Wrong? Neither?

The amount of credit cards you own will play a role in your credit report. More credit cards can help your credit score, as long as you’re paying them on time.

While the expert reports can be helpful, there’s no “magic” number of credit cards you need to obtain good credit. 

Rather, there’s a specific set of things you need to focus on so you can make sure you reach that good credit standing.

According to FICO and VantageScore, which are the 2 most recognized credit scoring systems, a good credit score starts at 690 and runs to 719.

Excellent credit starts at 720 and runs to 850. You can see the scale below for reference.

  • Bad Credit - 300-629
  • Fair Credit - 630-689
  • Good Credit - 690-719
  • Excellent - 720-850

You may be wondering, how many credit cards does someone with good credit have? The answer: it varies.

For example, Johnny and Sarah both have a credit score of 713. Johnny has a total of 12 credit card accounts while Sarah only has 2. How can they have the same credit score?

How To Get A Good Credit Score

credit score

There’s a number of different factors that play a role in your credit score besides a credit card. In fact, there’s actually 5 core areas you need to become familiar with to obtain good credit.

Good credit habits, practiced consistently, build toward a good credit score. Here’s what you need to do:

  • Make sure you’re paying all of your bills on time, always. Your payment history has the largest impact on your credit scores. Keep up with your payments and you’re going to see your credit scores increasing.
  • With the credit you have established, make sure you’re using it lightly. Credit utilization is another major factor used to calculate your credit scores. The lower your credit utilization is, the better. The general rule of thumb is to never go higher than 30 percent. For example, if you have a $1K credit card, you wouldn’t want to go higher than $300. Remember, the lower you can keep it, the higher your credit score will be.
  • Personally, I have around 30 open accounts. Always keep your credit accounts open unless there is a good reason to close them, like high fees or terrible service. Keeping older accounts open helps the overall average age of your accounts, which can also impact your credit score. Also, closing an account cuts into your overall credit limit, driving up your credit utilization.
  • Another thing you want to be mindful of is making too many credit applications in a short period of time. Credit checks for the purpose of credit decisions can cause a small, temporary dip in your score, and several in a short time can add up. These hard inquiries can stay on your credit report up to 2 years.
  • Lastly but not least, make sure you’re monitoring your credit reports. On average, 1 out of 4 people have mistakes on their credit report. If you see something that’s wrong, make sure you file a dispute. You may be surprised what’s showing on your credit report, so make sure you’re taking the time to review it on a regular basis.

Applying For New Credit

rules for credit cards

If you only have a few accounts open and you’re trying to get to a “good” credit score, you may want to open a new line of credit.

If you have fair credit, specifically on the higher end of the 630-689 score, you likely have a good chance of getting a good credit card that has benefits.

Before you get to applying, here are a few questions you may want to consider before applying for a new credit card.

Are the credit card fees worth it? 

 When you’re first building your credit, credit fees are a part of the credit building process. When you have good credit, you should be able to find no fee cards.

Some people will close or downgrade their card to avoid those types of fees. It all depends on the value of the card, you have to determine if fees are worth the rewards you’re going to get with a new credit card.

You may find the value you get is worth the fee. If you have too many cards to manage, you could wind up paying a ton in fees without making great use of the individual cards.

Will you be able to​​​​ properly track your spending and bills? 

There’s no question about it, if you have a lot of accounts to manage, it can be difficult to get the most out of every credit card you have. 

If you only have a few accounts to manage, it’s easier. If you have a lot of credit card accounts, it can be tough to keeping track of them all. 

Personally, I have a system down where I have all my cards in a spreadsheet, I’d certainly recommend it if you have a lot of cards. 

As for payments, you don’t want a $35 late fee, so setting up auto pay can certainly help with that. A missed payment can hurt your credit.

If you get to 30 days or more, that can hit on your credit and stay for a long time. Always make sure you pay your accounts on time and if you choose auto pay, make sure the money is in the account.

Does your acco​​​​unt allow you to keep the rewards?

If you choose to close a rewards credit card, you could lose all the points or miles you’ve earned in your account.

Before you close your account, you need to make sure you use them up. 

The frequent-flyer miles or hotel points you can earn with travel credit cards are typically stored within the airline or hotel rewards program connected to the card, so you may not lose these if you close your card, but it’s best to check with the issuer to make sure. 

The last thing you want is to lose all your hard earned points and miles, so always be mindful of that.

In closing, there’s nothing wrong with applying for new credit. Just make sure you’re not applying for too much credit in such a short period of time. 

The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. Additionally, the opinions of the commenters are not necessarily the opinions of this site

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