How Many Credit Cards Should You Have?

How many credit cards should I have?

Starting with two credit cards is a great baseline. Having two credit cards from different lenders gives you flexibility, and if one card or lender is compromised, you have a backup and aren’t stranded without access to credit.

Americans on average have 3.9 credit cards as of the third quarter of 2023, according to credit bureau Experian. Most people build their credit portfolio over time as they age and their credit needs expand.

Here are some questions to ask yourself when assessing your credit cards:

• Am I able to manage and pay all my bills on time each month? 

• How do my credit card perks and rewards stack up to my spending habits?

• Do I know what benefits my credit cards carry, and are they complementing each other or overlapping? 

• Am I comfortable with annual fees, and are they worth the benefits?  

• Do I have older cards that help maintain a long credit history? 

• Are my cards diversified enough to cover different needs or emergencies?

» Get your free credit score with NerdWallet

How many credit cards is too many?

Credit bureaus suggest that five or more accounts — which can be a mix of cards and loans — is a reasonable number to build toward over time.

When considering how many credit cards to have, you'll want to consider how many you can comfortably manage to avoid missing payments or overspending, which will drag your credit scores down.

How many credit cards you have will affect your average credit age and credit utilization, which is how much of your credit you have in use. The age of your credit and your utilization are both factors that affect your credit scores.

Risks of having too few credit cards

Having too few credit cards isn't necessarily a problem on its own, but it can come with some potential risks or limitations, especially when it comes to your credit score.

• Limited credit history: Credit scoring formulas don’t punish you for having too many credit accounts, but you can have too few. Creditors like to see a long, stable credit history. It’s not enough to have one really old card. Your credit scores consider the average age of all of the cards you have, and other credit, such as loans with a fixed payment each month.

• Difficulty generating a credit score: Having too few accounts can make it hard for companies like FICO and VantageScore to issue you a credit score. This is called a thin credit file, and it makes it harder for people to build their score because they're viewed as riskier by lenders.

• Higher credit utilization ratio: With a thin file, how you use your credit can have a bigger effect on your scores than if you had more accounts. One example: With only a few cards, it might not take much spending to use a lot of your overall credit limit, which can drive your credit utilization up. Generally, using 30% or less of your credit limits will put you in a good position, but people with the best scores tend to use less than 10% of their available credit. More cards may help you lower your credit utilization.

• Less payment history: With only a few cards in your wallet, you don’t have the opportunity to show lenders that you can make consistent on-time payments. Payment history is the most important credit scoring factor, so your ability to pay on time every month is crucial to showing your creditworthiness.

» MORE: Does opening a new credit card harm your credit score?

How to manage multiple credit cards

Space out credit card applications

Each application for credit causes a hard inquiry, which can ding your scores by a handful of points. The effect is small and fairly short-lived. However, applying for multiple credit cards in a short period of time can be interpreted as a sign of credit risk, and all those hard inquiries add up.

TIP: Spacing credit applications about six months apart can prevent multiple hard inquiries from affecting your scores.

Coordinate multiple billing cycles

This might seem obvious, but the more credit cards you have, the more due dates and credit limits there are to keep track of.

TIP: Automating monthly payments or changing your due dates to the same day or to align with paydays can help you remember to pay. You can also track your credit utilization, spending and income on the NerdWallet app.

Time credit applications with big future purchases

If you’re planning to make a big purchase — such as  a new home or car — it’s a good idea to time your credit applications to protect your credit scores. Applying for a single credit card can ding your credit scores, but the points will rebound in about six months.

TIP: Keep this time frame in mind and hold off on credit card applications until you’ve completed your big purchase.

» Getting ready for a big purchase? Don’t forget to temporarily unfreeze your credit