August 6, 2024

How Many Credit Cards Is Too Many?

How Many Credit Cards is Too Many
Credit cards offer a convenient way to make purchases and build credit, but it's important to use them wisely and watch how many you accrue. Finding the sweet spot between convenience and potential pitfalls is key to maintaining your financial stability.
It’s not uncommon to question how many credit cards is too many, especially if you’re having difficulties managing the ones you have or are tempted to fill out another credit card application. With a little guidance on how to strike the right balance and properly manage your credit cards, you can find a number that supports your needs and financial goals.

How many credit cards is too many or too few?

The number of credit cards you have isn’t a factor in credit scoring formulas, like FICO or VantageScore, meaning there’s no penalty to your credit score whether you have one or ten cards. But there are indirect ways that a growing credit card collection could impact your score, especially if it affects your credit utilization or timely payments.
Your credit utilization rate is the percentage of your available credit across all your credit cards that you’re currently using. A higher rate can signal to lenders that you rely too much on your credit cards, while a lower rate implies better payment habits and balance management. While having more credit cards might increase your overall credit limit and help you keep your rate low (as long as you don't increase your spending), having too many cards could tempt you to overspend.
If you overspend and carry high card balances, your credit score will go down. What’s more, if you struggle to make timely payments due to overspending and high balances, this can reduce your credit score even more.

How many credit cards should I have?

Deciding on the right number of credit cards for you depends on your financial situation and your ability to handle credit responsibly. Here's what to consider based on your experience level and spending habits:
To handle multiple credit cards well, make sure you can easily pay your bills. Try to pay off what you owe each month to avoid extra charges and growing debt. Managing several cards means enjoying perks while being mindful of your spending and payment habits.

Potential issues with having multiple credit cards

Having too many credit cards could derail your financial goals and hurt your credit. Here are four potential issues with having or applying for too many cards:

1. Applying for too many credit cards in a short time window

When you apply for a credit card, the issuer reviews your credit history, which shows up as a “hard inquiry” on your credit report to signal that you’re actively seeking new credit. One hard inquiry every once in a while will only have a temporary and minimal effect on your credit, but having multiple inquiries within a short time frame could reduce your score and signal to creditors that you’re a risk to lend to.

2. Managing multiple billing cycles

Managing multiple credit cards means keeping track of different billing cycles and payment due dates. The more cards you have, the more challenging this task becomes. If you lose track of your balances or miss payments, you could hurt your credit score or end up with an unmanageable amount of debt.

3. Timing credit applications with big future purchases

If you plan to make a significant purchase soon, like buying a home or car, you should avoid opening new credit cards in the months leading up to your purchase. Any dip in your credit score from a hard inquiry could affect your loan eligibility or interest rate.

4. Potential for overspending

More credit cards mean more opportunities to spend. If you spend more than you can pay back, you risk accruing debt and owing interest — which can build quickly. To avoid this, it helps to have a budget to control your spending.

How credit cards affect your credit score

How you use your credit cards and manage your credit card debt impacts your credit score — which ultimately determines your eligibility to get approved for loans, mortgages, and other types of credit. Here’s how:

Maintaining control and avoiding credit card overload

To build credit and keep a healthy credit score, you need to manage your credit cards effectively. But if you’re having trouble handling payments or keeping track of all your cards, apps like EarnIn can help you get your pay as you work.
If you’re relying too heavily on your credit cards, EarnIn’s Cash Out tool provides access to your earned wages, giving you an alternative way of handling day-to-day costs and unexpected expenses. You can get up to $150 a day and up to $750 every pay period with no credit checks, no interest, and no mandatory fees.
The EarnIn app also includes a free Credit Monitoring tool to keep a close eye on your credit score any time, at no cost. With these powerful financial tools, EarnIn gives you the backing you need to achieve your financial goals.
Plus, we can also help you strategize credit card debt repayment with our free credit card payoff calculator!
Download EarnIn now and experience money at the speed of you.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

You may enjoy

Thumbnail for How to Check How Many Credit Cards Are in Your Name
How to Check How Many Credit Cards Are in Your Name
Wondering how many credit cards you have? Learn how to find and manage all your credit accounts easily with this guide.
Thumbnail for What Credit Score Do You Need To Get a Credit Card?
What Credit Score Do You Need To Get a Credit Card?
Wondering what credit score you need for a credit card? Find out the required scores and learn tips to improve your chances of approval.
Thumbnail for What Happens When You Exceed Your Credit Limit?
What Happens When You Exceed Your Credit Limit?
Understand the risks of exceeding your credit limit. Learn how it affects your credit score and financial health before you start using your new card.
Thumbnail for Is it Possible to Have a 900 Credit Score?
Is it Possible to Have a 900 Credit Score?
Is it possible to have a 900 credit score? Discover the answer, how scores are calculated, and the benefits of an excellent score in this guide.
Thumbnail for 5 Best Low-Interest Credit Cards
5 Best Low-Interest Credit Cards
Find the best low-interest credit cards to save money when carrying a balance. Compare top offers with low APRs, rewards, and no annual fees.
Thumbnail for How to Use a Credit Card Responsibly: 8 Tips
How to Use a Credit Card Responsibly: 8 Tips
Get essential tips for using a credit card responsibly. Manage your spending, avoid debt, and build a strong credit score with smart strategies.
Thumbnail for Pros and Cons of Credit Cards in 2024
Pros and Cons of Credit Cards in 2024
Explore the pros and cons of credit cards, from building credit and earning rewards to managing debt and fees, to help you make informed financial decisions.
Thumbnail for Pros and Cons of Joint Credit Cards
Pros and Cons of Joint Credit Cards
Learn more about joint credit cards — their pros and cons, how they impact finances, and how to make informed decisions with EarnIn's insights.
Thumbnail for Are Travel Credit Cards Worth It? Explore the Pros and Cons
Are Travel Credit Cards Worth It? Explore the Pros and Cons
Travel credit cards give you rewards for every dollar spent. But are travel credit cards really worth it? Here’s a guide.
Thumbnail for How to Get an 850 Credit Score
How to Get an 850 Credit Score
Reaching a perfect credit score is hard, but not impossible. Learn how to get an 850 credit score with these essential tips.
Thumbnail for How to Build Credit for the First Time: 7 Strategies
How to Build Credit for the First Time: 7 Strategies
Building credit from scratch? Check out our guide on how to build credit for the first time and get some practical tips for credit newbies.
Thumbnail for How to Fix and Repair Your Credit: A Detailed Guide
How to Fix and Repair Your Credit: A Detailed Guide
A step-by-step process to repair your credit score.
A wallet with bank notes sticking out
Access Your Earnings Today
Make the most of your money