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Published September 8, 2021

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.

Every credit card offers different features, welcome bonuses and perks. With so many choices, it can be tempting to apply for more than one. So the question is, how many credit cards should I have? There’s no right or wrong answer as it depends on your needs and how comfortable you are with having access to a lot of credit. That said, there are a few things you should consider before you apply for a new card.

» MORE: What is a credit card?

Reasons to get multiple credit cards

First off, you should have at least one credit card as it’ll help you build your credit score.

If you’ve learned to manage that card well, you can consider a second or even a third one. Many people get a second credit card to diversify. For example, suppose your first card was a Visa. In that case, you may want to get a Mastercard or American Express card as your secondary card. By doing this, you’ll always have a backup card available.

Another major reason to consider getting another credit card is the welcome bonus and perks. Sign-up bonuses change all the time, but there have been offers worth between $200 – $1,000 in the past.

In addition, there might be a specific benefit that you want that comes with a card, such as

» MORE: Types of credit cards to know

How multiple credit cards can affect your credit score

Your credit score is one important factor that helps determine your creditworthiness. When you apply for a new credit card, there’s an immediate effect on your credit score.

» MORE: How long should I wait between credit card applications?

How you use your new card could also affect your score.

Here’s why:

  • New inquiry. When you apply for a new credit card, the provider needs to perform a hard credit inquiry on you. Whether you’re approved or not, you’ll likely see your credit score drop a few points.
  • Credit utilization ratio. A new credit card application will usually result in your credit utilization ratio dropping, which helps improve your credit score. That’s because you’ll now have a higher combined credit limit, but you may not be spending more.
  • Payment history. Paying all of your credit card bills on time will help you maintain or improve your credit score.

» MORE: How to check your credit score

The pros and cons of having multiple credit cards

Pros

  • Diversification. 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 debt. For some people, having access to more credit encourages them to spend more.
  • Your credit score will decrease. When you apply for a new credit card, your credit score will likely temporarily drop by a few points.
  • More bills to manage. You’ll need to be on top of all your accounts to ensure they’re paid on time and there’s no fraudulent activity.

Generally speaking, having two or three cards is likely the ideal number for most Canadians since you’ll always have a backup card handy. That said, if you always pay your bills on time and don’t mind managing multiple cards, having a few more cards is fine too.

» MORE: Why is credit card churning so popular?

About the Author

Barry Choi
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. You can reach him on Twitter: @barrychoi.

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