How Many Credit Cards Should You Carry?

There's no magic number. Consider your taste for simplicity (or complexity) and your ability to mange spending.

Ben LuthiAugust 19, 2015
Choose the Right Number of Credit Cards for Your Lifestyle

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Ask a room full of personal finance experts how many credit cards you should carry, and you might get as many answers as there are experts. Some advocate a credit-free lifestyle. Others enthusiastically deploy a dozen or more cards to maximize rewards, save money on interest or enjoy perks.

Who's right? All of them, in a way. The "correct" number of cards to carry depends entirely on you — your comfort level with complexity, your spending habits, your ability to resist the temptation of thousands of dollars in available credit.

Let's start with this: You don't need multiple cards to build a good credit score. Just one is enough to do the trick. Beyond that, consider the pros and cons of carrying multiple cards.

Benefits of additional cards

Having multiple credit cards can help make life easier if you use them responsibly:

Maximizing rewards and perks: Credit card companies offer generous rewards and perks on some of their cards to encourage you to apply. For example, one may offer extra cash back on groceries or gas while another may give hotel points or air miles. No one card does it all, so carrying more than one card can help you earn more rewards as you use different cards for different purchases.

Flexibility: Some cards are more widely accepted than others. It's generally a good idea to have a backup for situations where your primary card isn't accepted. Additionally, if one of your cards is lost or stolen, it can take several days before you receive a replacement. If payday isn't until next week and you're short on cash, having another card on hand can keep you from overdrawing your checking account.

Lowering your utilization: A key element of your credit score is credit utilization — the amount of your available credit you're using. The lower your utilization, the better for your score. Each additional card in your wallet increases the amount of available credit. Assuming the same level of spending, that means lower utilization

Dangers of having 'too many'

The more cards you have, the more effort is required to stay on top of them. Pitfalls to be aware of:

Keeping track of spending: It can be hard to remember how much you've spent on each card. If staying organized isn't your forte or you don't track your spending with a budget, carrying several cards may not be a good idea.

Managing due dates: Some credit cards allow you to choose your due date, but many don't. That can leave you with due dates spread throughout the month, making it easy to lose track, pay late and suffer penalty fees and interest. You can avoid this by keeping track of your due dates with a spreadsheet or sign up for email or text reminders. If you don't want the extra hassle, fewer cards may be the better choice.

Annual fees: Many of the most rewarding credit cards come with annual fees in the $100 range. Using one such card regularly can earn enough in rewards to easily cover the fee. But the more cards you spread your spending across, the harder it gets to recoup the fee on any one of them.

Making the decision

There's no right or wrong answer when it comes to how many credit cards you should have. It all depends on your preference and financial situation. Is maximizing rewards one of your goals? If so, you'll benefit from having multiple cards. Do you value simplicity above all else? Then sticking to one card might be the way to go. Perhaps you don't want to be tempted to overspend, so you want no card or a debit or prepaid card.

Regardless of what you choose, your best bet is to make the decision based on your spending habits, organizational tendencies and personal values.

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