How many credit cards should I have?

The answer to the question of how many credit cards a person should own depends on the individual consumer. Having one credit card may be the right choice for some people, while others can benefit from having more than one account. The real question is “How well can I manage the credit cards that I have?”

Average Number of Credit Cards

The average American has somewhere between 5 and 10 credit cards. There are people who have up to 50 different credit card accounts open, though. That doesn’t necessarily mean that they are in trouble. Some people feel that you can’t have enough credit, while others are cautious about having multiple accounts open, since they have concerns about being able to manage them responsibly.

Managing Your Accounts

There are several strategies you can use to manage your credit card accounts effectively. If you are going to open up a single credit card account, you will likely want to make sure that you have a Visa or a MasterCard. These cards are accepted by most retailers, whereas other cards like American Express or Discover may not be.

Another suggestion for managing your credit cards effectively is to designate a particular card for certain categories of purchases. If you operate a business, you may want to have one card for all of your expenses related to it. It will make it easier for you to keep detailed records and your accountant will thank you at tax time if you keep them separate from your personal purchases.

You may also want to keep one credit card in a separate location, such as a safe or a safety deposit box. That way, you have access to it if your purse or wallet is stolen. It’s also an emergency source of credit for you if something comes up that you weren’t expecting.

Some people make a point of not carrying a balance on credit cards offering rewards. They use the card for purchases and then transfer the balance onto a card with a lower interest rate or just pay it off immediately.

Opening a credit card account with a store where you do a lot of shopping can make sense, especially if you are also getting discounts, points or other rewards for using it. Keep an eye on the interest rate you are being charged, though, since store cards tend to come with a higher rate of interest than those offered by banks or other lenders.

The Right Number for You

The right number of credit cards for you is what you feel that you can manage without going overboard on your spending and having trouble making the payments on. If you are in a situation where you are trying to establish credit for the first time, one card is enough. A person who is trying to rebuild their credit should also stick to a single card and demonstrate a pattern of making the payments on time for a while before applying for more credit.

Keep in mind that closing credit card accounts can work against you. A lender will want to see a history of accounts being open for a long time as part of its evaluation of your creditworthiness. If you pay off a credit card account, keep it open and charge a small item on it from time to time. Then pay off what you owe at the end of the month. That way, your account won’t be closed by the credit card company for lack of activity.

If you decide that you can manage multiple credit card accounts, it still pays to consider how much interest you are paying on each one. If there is a large gap between interest rates on various cards, you may want to consider transferring your balance to a card with a lower interest rate. There may be lower interest rate option available from the same bank or lender, and it doesn’t hurt to contact the company to see what it can do for you.

Another advantage of having more than one credit card is that it gives you some leverage when you want to make a switch. You can contact a company that you are already doing business with and explain that you are interested in doing a balance transfer. Ask what the company would be able to offer you if you did so for a preferred interest rate (even a temporary one) or another type of reward that would be appealing to you.

If you want to find out more about the different credit card options available to you, check out our free credit card “Chaser”. Use the tool to find and compare the best credit cards today!

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Disclaimer: This content is not provided or commissioned by American Express, Visa, MasterCard, Discover, or any other credit card company or issuer. The opinions expressed here are the author's alone, not those of any credit card company or issuer, and have not been reviewed, approved or otherwise endorsed by any credit card company or issuer. Credit Card Chaser may be compensated through various affiliate programs with advertisers. As always, Credit Card Chaser is an independent website commmitted to helping people research credit card offers and find the best credit card!