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.


Recommended Articles

Grab a Friend! Social Strategies to Help You Save

There is strength in numbers! This is especially true when you’re trying to reach your goals and change behaviors. Weight Watchers uses this principle to support healthy eating, and Alcoholics Anonymous uses it to encourage sober living. Emerging research shows that peer support can increase your confidence and sense of control. Social support also makes… Read more

How can people on government assistance save for retirement?

“Where are the best places for people on state assistance to start saving for retirement? I’m looking for something with low starting balances and low monthly transfers to the account. Do you recommend any financial companies, savings accounts, government-issue bonds, stock market?? I am so confused!” Submitted by Jessica L. I want to acknowledge your… Read more

Understanding Your Debt

Hi, I’m Saundra Davis, financial coach here at SaverLife. Today we are going to talk about one of the biggest financial stressors in many of our financial lives: debt. The “No Judgment Zone” So, the very first thing is remember the “no judgment zone.” Everything that you have done in your financial past that you’re… Read more