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Published July 15, 2022

How Many Credit Cards Should I Have?

There’s no magic number of credit cards you should have — but knowing your spending habits, ability to pay on time and credit score will help you decide.

Whether you’re looking to earn more rewards, improve your credit or cover a few extra purchases every month, the idea of getting a second (or third, or fourth) credit card may be intriguing.

There are no laws in Canada preventing you from having multiple credit cards, and there are definite benefits to carrying more than one card simultaneously.

Determining how many cards you should have depends heavily on just how well you manage the ones you’re already working with, and how any extra cards will impact your overall finances.

Is it a good idea to have multiple credit cards?

Just as having at least one credit card can help build your credit history and score, having multiple credit cards can deliver some fairly useful benefits.

Having more than one card might be the right strategy if you want to:

Be covered in emergencies

Many people get a second card to diversify the number of credit card networks they deal with. For example, suppose your first card was a Visa. In the unlikely event that the Visas’s back-end tech goes down and you can’t use your card, or something happens to your account and it’s temporarily unavailable, having a Mastercard or American Express card as your secondary card means you’ll have a backup financing option available.

Earn more credit card rewards

Having more than one credit card can also help you score generous welcome bonuses from your new card provider. Sign-up bonuses change all the time, but there have been offers worth between $200 – $1,000 in the past.

An additional credit card can also help you diversify the types of rewards you collect. One card might help you accrue travel miles while another earns cash back on things you buy all the time, like groceries.

You might also choose to carry multiple credit cards to maximize behind the scenes benefits, such as:

Improve your credit score

If you’re a responsible credit card user — mindful of your credit limit and diligent about paying your balance in full each month — carrying multiple cards may eventually benefit your credit score.

How? When you spread your spending across more than one credit card, your overall credit utilization ratio comes down.

Let’s say you were previously charging $500 a month to your only card, which has a credit limit of $1,000. Your credit utilization would be 50%. If you get a second card with a credit limit of $2,000, but your spending doesn’t increase, your $500 of spending makes for a 17% credit utilization across the two cards.

Lower utilization means lenders may see you as less of a credit risk. Showing that you can pay off two credit cards on time every month won’t hurt, either.

Risks of having too many credit cards

Carrying more than one credit card isn’t necessarily a clear path to more rewards and a healthier financial profile. Opening up additional lines of credit comes with its fair share of risks.

A lower credit score now

When you apply for a new credit card, there’s an immediate effect on your credit score. The provider will perform a hard credit inquiry on find out if you’re a reliable borrower. Hard inquiries typically have a temporary negative effect on credit scores — whether you’re approved for a new card or not.

A lower credit score later

Maintaining or improving your credit score requires you to pay all of your credit card bills on time. If multiple credit cards turn into multiple bills that you can’t keep up with, and you’re forced to make only minimum payments, your credit score will suffer over the long-term (and you’ll end up paying a lot of extra interest).

Strained finances

The risk of overspending, being clobbered with high interest charges and falling deeper into debt grows with every credit card a person adds to their wallet.

If getting a second or third card might trigger unnecessary spending that your budget can’t support, be honest and self-aware about it and consider saying no to those new cards.

How many credit cards are too many?

Whenever a highly personal financial question like “Should I rent or buy?” or “What should I invest in?” gets asked, the answer is almost always the same: It depends.

That goes for determining how many credit cards are too many, too. It all depends on what you can afford to spend and pay back on time.

If you’ve never had a problem paying down your single credit card and see no problem in paying off a second or third every month, you can probably handle the extra responsibility. But if having one credit card is already putting an uncomfortable amount of pressure on your finances, what’s a second one going to do for you?

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Pros and cons of having multiple credit cards

Pros

  • Coverage in case of emergency. Having multiple cards will likely mean that at least one of them will work at all merchants.
  • Earn more points or cash back. Another credit card can give you a nice welcome bonus or additional cash back in some categories.
  • Added benefits. Some credit cards may have extra perks, such as extended warranty insurance, no foreign transaction fees and companion vouchers.
  • Builds credit. If used responsibly, having another credit card could improve your credit score.

Cons

  • Could lead to unmanageable debt. For some people, having access to more credit encourages them to spend more.
  • Credit score drops. Your credit score will decrease — short-term when you apply and possibly long-term if you can’t make your monthly payments consistently.
  • More bills to manage. You’ll need to be on top of all your accounts to ensure they’re paid on time and aren’t falling victim to credit card fraud.

About the Authors

Barry Choi

Barry Choi is a personal finance and travel expert. His website moneywehave.com is one of Canada's most trusted sites when it comes to all things related to money and travel.

Clay Jarvis

Clay Jarvis is NerdWallet’s mortgage and real estate expert in Canada. Thus far, his entire professional writing career has revolved around real estate. Prior to joining NerdWallet, he was the editor and senior writer for four publications, including the leading website for the country’s mortgage industry, Mortgage Broker News. Clay has written 30,000-word examinations of Canada’s real estate investment market, interviewed the industry’s most powerful leaders and analysts, and has helped choose both the nation’s top realtors and mortgage brokers. He is based in Toronto, Ontario.

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