How many credit cards should I have?

“Hi Saundra! As someone who is getting her credit back in order, I want to be wise about applying for credit cards. I have two and working hard to keep them both under 30% utilization. I’m considering applying for one last card. How many credit cards is too many?”

Submitted by Laurin O.

There are many opinions out there about credit. Some say that you shouldn’t use credit cards at all, while others say that credit cards can be a helpful financial tool when used wisely. I tend to be in the latter group. I want people to be confident using all financial instruments (banking, matched savings, debt, etc.) and I want them to know how to choose what is best for their financial goals.

Think about what having that third card would accomplish for you. What is the benefit of adding a third card? You mention “working hard” to maintain a 30% utilization rate. Does that mean you are using the cards to meet your expenses? If so, how might access to more credit change your financial choices?

Only you know the answer to “too many” cards, so focus on the point of the cards. Credit utilization (both collective and on individual accounts), the number of cards you have, and your credit history all impact your credit score. Adding a credit account can adversely impact two components (average length and number of accounts), not to mention the potential for over-extending yourself.

If you aren’t sure that what you are doing is working for you try using a free credit scoring simulation to see how adding that third card that might impact your goal. Keep in mind it isn’t a FICO score, but these tools can be great for helping you consider your choices.


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