How Many Credit Cards Should I Have?

Card limits, spending habits and ability to pay every card on time help determine your sweet spot.

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How Many Credit Cards Should I Have?

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When it comes to credit cards, how many is too many? Unfortunately, there's no magic number of credit cards to pursue. There are guidelines that can help you navigate your way to solid financial ground, though.

The number of cards you have — or at least their combined credit limits — can affect your credit score, which then impacts your ability to secure important things like car loans and apartment rentals.

How many cards do high scorers have?

People with scores of 785 or higher — whom credit scoring company FICO calls “high achievers” — have an average of seven cards, which include open and closed accounts.

In contrast, Americans on average have 3.1 credit cards and 2.5 retail (store) cards, according to a 2017 state of credit report by Experian. (Check your free credit report to see how many accounts you have.)

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Does the number of cards impact my score?

The number of cards you have does not directly influence your score. If having more cards means you use less of your available credit, that can help your credit score.

But if having lots of cards means you become disorganized and occasionally pay late, that can hurt your score. More important than the actual number of cards is whether you pay on time and use a relatively small portion of your available credit. Here are a few things to keep in mind if you're thinking of opening (or closing) a credit card:

Your credit utilization

The portion of your credit limit that you actually use, also called the credit utilization ratio, can account for about one-third of your overall credit score. In general, keeping your balances well below 30% of your available credit should help you maximize your score.

Opening new cards (and increasing your overall line of credit) could theoretically improve your credit score by decreasing your credit utilization. But applying for a new card often results in a hard credit inquiry, which can temporarily take a few points off your score.

Credit age

When it comes to your credit cards, age matters. Creditors like to see a long, stable credit history. It’s not enough to have one really old card, though.

Your credit score considers the average age of all of the cards you have. That doesn't mean you can never close a card. If you have a compelling reason — like high fees or poor service — it may be worth a possible temporary ding to your score.

Your payment history

About 65% of your FICO score is determined by your payment history and credit utilization. That means paying on time is far more important than how many cards you have. It's one of the few surefire ways to improve your credit score.

VantageScore, another major scoring company in the U.S., doesn't give percentages, but it calls payment history "extremely influential."

So how many cards should I have?

Ultimately, the number of cards you have has far less to do with your score than how you handle the cards you have and the money you owe. Here are five habits that will help polish your credit profile regardless of the number of cards you have.

  • Pay on time, every time.

  • Use credit lightly. Try to keep utilization under 30%, and lower is better.

  • Keep credit card accounts open unless you have a compelling reason to close them.

  • Have both installment loans (a set number of payments of the same amount) and credit cards.

  • Space credit applications about six months apart so that you don't have several credit checks at once.

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