How Many Credit Cards Should You Have for Good Credit

One of the most prevalent questions consumers ask is how many credit cards is a person supposed to have. Is it good to have multiple credit cards? Will opening multiple credit cards affect your FICO score?

These are all fair questions to ask if you’re new to applying for a credit card or are considering opening a new account. For the individual that’s experiencing low cash flow or a complete cash shortage, applying for a credit card isn’t a wise option. 

A person with a stable job and trying to build their credit score gradually, applying for multiple credit cards may be ideal. There are many different answers to the question about whether it is good to have many credit cards. 

Below, you’ll receive more information to make an informed decision on your own behalf. 

How Many Credit Cards Should a Person Have?

There’s not a magic number about the number of credit cards a person should carry. Your answer will ultimately depend on your ability to pay all your bills on time and current spending habits. 

If you enjoy earning lots of rewards points, then you can always explore applying for credit cards that will provide benefits for gas, travel, and grocery purchases. If you want to keep your finances simple, you can just apply for a few credit cards. 

If your credit isn’t at the level you want it to be, you can apply for credit cards for poor credit instead. The important question is if the number of credit cards you have will affect your credit score.

You’ll find the answer to this question below. 

How Many Credit Cards Should You Have for Good Credit?

There are two main factors you should consider when applying for a credit card. To begin, it’s important to address the first factor. Your credit score won’t be affected only by the number of credit cards you have. 

Your credit score will only be impacted by your spending habits and how frequently you pay your bills on time. Your credit score will improve when your creditors deem you to be a trustworthy consumer. 

On the other hand, the more you use your credit cards can impact your score. This is called a credit utilization ratio. If this ratio is too high, then you could risk negatively impacting your credit score. 

Nonetheless, if you don’t use your credit cards enough, building a great score can become nearly impossible. Finding the sweet spot in using your credit cards responsible and relying on your own means is how you can elevate your credit score. 

Thus, it doesn’t really matter how many credit cards you have. The determining factor in building your credit card is how well you use the credit cards in your arsenal. 

How Many Credit Cards Does the Average Person Have?

Americans have about three credit cards and two retail store cards on average, per a consumer report from Experian. With that said, how many credit cards do you have? This may seem like an obvious answer, but it’s possible that you have active accounts that are affecting your credit score. 

Therefore, you should request a credit report at least every year to check your score, and make any disputes against accounts you never opened. This can possibly improve your credit score and prevent the onset of credit fraud. 

People new to applying for credit cards may be intimidating when dealing with credit reports. However, every person is entitled to a free annual credit report from three of the major credit bureaus: TransUnion, Equifax, and Experian.

There are also many online resources available to aid you in understanding credit reports and credit scores

Should You Use a Credit Card for Emergencies?

Contrary to popular belief, a credit card isn’t to be used in an emergency, such as when you lose a job or fall short of cash in a month. Credit cards can be used in situations where you don’t have the money to pay for a sudden car repair or a vacation expense. 

The interest rates associated with credit cards aren’t designed to cover long-term emergency situations. Therefore, you should think twice before applying for a credit card if your financial situation isn’t ideal. 

What are the Factors Affecting Your Credit Score?

As you can see, the number of credit cards you have won’t affect your credit score. This is only true if you’re considering other important factors, such as:

Your Payment History:

A majority of your FICO score is determined by how well you are making on-time credit card payment. After all, it makes the most sense. Regardless of the number of credit cards you own, creditors are only worried if they’re profiting from your payments. 

Paying on time is much more important than taking out three and even five credit cards. 

Your Credit Utilization Ratio:

As mentioned before, your credit utilization ratio will strongly influence your credit score. Using your credit cards responsively will let your creditors know that you’re making wise purchasing decisions and have stable income.

Relying too much on your credit cards can send a red flag that you could miss a payment, default on your bills, and accumulate massive debt in the future. 

Your Credit Age:

Age matters when it comes to credit cards as well. Creditors will reward consumers who have a long, stable credit history. While this doesn’t mean you have to keep all of your credit accounts open, the more loyal you are to a creditor, the better your credit score will be. 

The Number of Credit Cards You Own Doesn’t Matter

People have varying reasons for owning their credit cards. Some may only use one credit card, while others will apply for three different cards. Ultimately, the number of credit cards you own doesn’t matter. 

When you commit to making smart purchasing decisions, building a long credit history, and relying more on your income than your credit card, you can work towards improving your credit score and expanding your financial wherewithal over time. 

Credit Shout is a community of personal finance experts dedicated to helping you save money and make smart financial decisions. Learn how to master your credit card rewards, improve your credit score and start eliminating your debt.