How Many Credit Cards Are Too Many?

Opening one account will let you start your credit journey. You need more than one card to build credit quickly, though. If you can only qualify for one card, keep your balance low and pay your bills on time. Within a year, you should have a credit rating that lets you start another account.

The average American has four credit card accounts. Four credit cards make it possible to build a long credit history that shows you know how to manage debt. Some experts point out that people with Very Good or Exceptional credit scores (785 or higher) have seven cards in their histories. They don’t necessarily use all of the cards, but they used a series of credit card accounts to reach higher scores.

There isn’t a perfect number of credit cards. While you should have a few cards to build your credit history quickly, you don’t want too many accounts open at the same time. For instance, if you have 10 open credit card accounts at once, companies might wonder why you need access to so much credit.

In most cases, companies simply look at your credit score instead of looking closely at your entire credit history. Maintain a high score by:

• Paying all of your bills on time.
• Checking your credit history at least once a year to have inaccurate information removed.
• Only opening new lines of credit when you need them.
• Keep your credit utilization ratio below 30%.

Your credit utilization ratio is the amount of credit that you access. If you have a $2,000 balance on cards with a $10,000 credit limit, then your credit utilization equals 20%.

While no one can say that there is a perfect number of credit cards to have, there are signs that you carry too many accounts. You know that you have too many credit cards when you:

• Want to open a new account to transfer old debt.
• Cannot afford to pay more than the monthly minimums on your current cards.
• Do not have any credit left on your current accounts.

Practice good habits to keep your credit score as high as possible. Focusing on how you use your credit cards matters more than the specific number of credit cards that you have. As long as you make payments on time, keep your credit utilization ratio below 30%, and dispute inaccuracies on your credit history, you should find that you get a rating that helps you qualify for low interest rates and other perks.

In the market for a new card? Check out our favorite credit cards that come with perks.