How Many Credit Cards Should You Have, Exactly?

How Many Credit Cards Should You Have, Exactly?

There’s a right number for everyone.

Whether you just signed up for your first credit card or you’re a seasoned pro at working the system to max out on credit card rewards, one question has likely crossed your mind: How many credit cards should I have?

It turns out the average person has 3.1 credit cards and carries an outstanding balance of $6,354. While carrying a balance, especially in that amount, is never a good idea, having three cards might not seem like a lot—especially considering most businesses and brands offer their own cards with their own perks these days.

But before you fill out your next credit card application, consider whether adding another card to your arsenal will help you achieve your financial goals—or drag you down into debt. That's easier said than done, but with the right tips and expert advice, you’ll be able to figure out how many credit cards are right for you.

How many credit cards should I have?

When it comes to the “right” number of credit cards, every person is different, and experts don't have a universal answer that applies to everyone. Beverly Harzog, a credit card expert and consumer finance analyst for U.S. News & World Report, recommends two or three cards for the average user (more on that below). While the ideal number of cards you carry in your wallet depends on a number of factors, everyone should have at least one card to build their credit rating, says Steven Millstein, a certified credit counselor and editor of CreditRepairExpert.org, According to Millstein, it’s less about how many credit cards you own and more about “how you use and manage your credit cards.”

How to apply for a credit card: timing matters

But one thing holds true for any cardholder: Whether you have three or 30 cards, it pays to apply for each one at least a few months apart. "Whenever you apply for credit, your credit report is flagged with a ‘hard inquiry,’ which will almost always result in a temporary decrease in your credit score,” Millstein said.

So what exactly is a hard inquiry? It's when a potential creditor—usually the bank that's considering your credit card or loan application—takes a thorough look at your credit history to help determine if you’re at risk of not meeting your financial obligations. Why should that lower your credit score? Because according to the logic of the credit industry, an individual who requests a significant type of credit (e.g., a credit card, auto loan, etc.) is under more financial duress than someone who has no need of credit, and so you represent more of a risk for the lender.

If your credit card application is approved, your credit score will receive a boost from the additional credit now available, so “occasionally these two things work in unison to balance out, and your score remains the same,” Millstein said. But if you’re declined, you now have a hard inquiry on your credit report for two years, without the added credit to offset that hit to your score.

How many points your credit score may go down after a hard inquiry depends on a number of factors, but it could be anywhere from five to 10 points, says Harzog. If you’ve applied for multiple cards, those points can really add up, especially for people who already have a poor or fair credit score.

Signing up for a card and then closing it isn’t great for your credit, either. For starters, you’ll already have received the hard inquiry for the credit request, so the damage could already be done. Plus, your credit utilization —or the amount of credit you actually use compared to what you have available—is another important factor when it comes to your overall credit score. “If you decide to close a card, this decreases your available credit and makes the ratio go up, which makes the credit score go down,” said Harzog. “I don’t recommend closing cards unless there are extenuating circumstances, like a high annual fee on a card you never plan to use again.”

What kind of credit card should I get?

To figure out the type of credit card that suits your needs, take a long, hard look at how you use your cards and what you want to get out of them. Generally speaking, credit card users fit into a few broad categories outlined below. Knowing which profile is most similar to your own will help you figure out how many credit cards you should have and what type of card is a good match for your needs.

Scenario: Someone with bad credit

Suggested number of cards: 1

Type of card: A secured credit card

The breakdown: For anyone with a history of poor credit, Millstein recommends starting out with a secured credit card. A secured card will report to the credit bureaus and will help you build your credit score. For people with bad credit scores, Harzog adds they should take on a secured card only after they're sure it won't just add to their financial woes. “I would want the person to look at why they have poor credit,” she said. “If they couldn’t stop spending with credit cards and went deep into debt, then building back your score in other ways might be a better first step.”

Scenario: Someone with nearly nonexistent credit history

Suggested number of cards: 1

Type of card: A secured credit card (or a student card, if that applies)

The breakdown: For people just getting started on their credit journey—like college students—Millstein also suggests a secured credit card, while Harzog recommends doing a little research to what other card options are available, especially if you're a student. “There are some good options for people with limited credit who get good grades,” she said. Then, only use that card, and stick to the basics of paying your bill on time and not running up a debt. “You need to have that foundation of having a budget in place to know how much to spend on your card and to be able to track your expenses,” she added.

Scenario: Someone who constantly travels

Suggested number of cards: 2 to 3

Type of card: Options that offer great hotel, air or general travel rewards

The breakdown: A credit card with great overall travel rewards is always a good choice for the frequent traveler, but if you have an airline or hotel of choice, then going with a card that specifically rewards you when you fly or stay with those brands might make more sense. Also consider looking for a credit card that doesn’t charge foreign transaction fees if you travel overseas often. Millstein warns people who use these types of cards to remember to avoid carrying a balance on them, as the interest rate is often higher (by anywhere from .67% to .92% on average) and you can quickly find yourself in debt.

Scenario: Someone who needs to organize their debt

Suggested number of cards: 2 to 3

Type of card: A balance transfer credit card

The breakdown: If you have a good credit score (think 700 or above), then a balance transfer credit card is a great idea for managing debt scattered across multiple accounts, says Harzog. Keep in mind that if you’ll be transferring over several balances, you’ll need a card with a high enough limit to transfer all your balances, and you’ll likely be charged a fee for those transfers as well. For large debts, though, Harzog instead recommends looking into debt consolidation loans, since they often have lower overall interest rates. Also remember that it’s not necessary to cancel a credit card once you transfer balances—doing so might even lower your credit score.

Scenario: Someone looking to maximize on credit card rewards

Suggested number of cards: The sky’s the limit … with caveats

Type of card: Rewards credit cards that offer the perks you want

The breakdown: When it comes to rewards credit cards, there’s an option for nearly every type of purchase. Making the most of multiple cards is a game best played by veteran credit card users, says Harzog, as it takes a lot of energy and strategy to keep track of all those balances and make sure everything gets paid on time. “If you have excellent credit and use the card strategically and pay your bills in full, then you can really have as many as you want,” she said. “If you get above seven or eight, it can be hard to handle, though.” With multiple rewards credit cards, Harzog also recommends checking your balances online every day to look for any fraudulent charges or weird fees.

Scenario: People 65 and older

Suggested number of cards: 1 to 2

Type of card: A low interest credit card

The breakdown: Seniors are often targeted for identity theft, so it helps to keep the number of credit cards to a minimum. It also helps to switch to low-interest credit cards as you get older and transition to a fixed income.

As it turns out, there isn’t always a straightforward answer for how many credit cards you should have. It’s important to remember that as long as you have a budget and you can pay off each card in full on or before the due date, then you can have as many credit cards as you can handle. Just try not to apply for them in quick succession, and be strategic about when you open them. “If you’re planning to apply for a mortgage or refinancing, then don’t open any cards within six months of doing so,” Harzog said. After all, getting that coveted piece of plastic is only worth it if your credit score doesn’t take a hit.

Cheryl Lock is a writer who specializes in personal finance topics relating to parenting, real estate and travel, among others. Her work has appeared online at Money, USA Today and Forbes, as well as in national publications like Parents, Woman's Day and Family Circle.