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How Many Credit Cards Should I Have?

Abid Salahi

Author

5 min read

You've seen some new credit card offers that seem too enticing to ignore.

But you already own one or two credit cards.

You may be wondering...

How many credit cards are too many? How many credit cards should I have?

Are there any benefits to owning and using multiple credit cards?

I personally use 3-4 different credit cards per month.

Why?

It's fairly simple. To save more when you spend more.

But there are a few things to make a habit of if you plan on owning multiple credit cards...

Let's dive in:

5 Credit Card Best Practices

1. Do Not Max Out Any of Your Credit Cards

This is so that your credit utilization ratio remains below the recommended 30% threshold.

Essentially, if you have a credit card with a limit of $3000 and spend around $2700 on average per month, you're using up 90% of your available credit.

Why should that concern you?

It will impact your credit score... negatively.

Instead you could spread your $2700 monthly spending across multiple credit cards and avoid maxing out a single credit card.

That will help you maintain an excellent credit score while using credit cards effectively!

2. Never Spend More Than You Can Pay for

If you find yourself struggling to pay down the full credit card amount each month, owning multiple credit cards can further impact your credit score.

Your payment history has a whopping 35% weight in determining your credit score.

That means every monthly payment you miss will contribute to bringing down a larger portion of your credit score.

So always make sure to pay off your credit card fully at the end of each month.

3. Avoid Cash Advances When Possible

Cash advances come with high fees and high interest rates, and they begin accruing interest immediately.

They are useful in cases of absolute emergencies but should generally be avoided.

Accruing a lot of cash advances can harm your credit score over time.

4. Do Not Close Old Credit Card Accounts

A long credit history can help improve your credit score, so it's best to keep old credit card accounts open.

The length of your credit history, or the amount of time you have had credit accounts open, is one of the factors that makes up your credit score.

When you close an old credit card account, you shorten your credit history, which can hurt your credit score.

Do you want to show lenders that you are a responsible borrower?

Having a longer credit history and track record of responsible credit card usage will definitely help with that.

5. Do Not Open Too Many New Credit Cards at Once

Every time you apply for a new credit card, it generates a "hard inquiry" on your credit report, which can lower your credit score by a few points.

Having a lot of new credit accounts open at the same time can be seen as a red flag by lenders and indicate that you may be taking on too much debt or have difficulty managing your finances.

It's safe to say that too many credit cards can also make it harder for you to keep track of your spending and make payments on time.

The bottom line

So how many credit cards should you have?

And what's the real benefit of owning and managing multiple credit cards?

Use each card to maximize rewards from your purchases.

Let me explain in more detail...

Do you travel a lot every year? Get a travel credit card that suits your needs.

Do you frequently shop from Amazon? Consider the Amazon Rewards Mastercard. I use it solely for my Amazon purchases and earn 5% cashback!

Apply Now More Details

I currently have or may soon have an Amazon Prime account

Amazon.ca Rewards Mastercard®

3.1

Finly Rating

Welcome Bonus

Up to $150

First Year Value

$393.95

Based on $2,000/mo spending. Calculate your rewards.

Annual Fee

Interest Rates

19.99% / 22.99%

RECOMMENDED CREDIT SCORE

300

Poor

560

Fair

660

Good

725

Very Good

760

Excellent

Get your free credit score

Why we like it

If you are a Prime member and want to maximize your cashback on your Amazon purchases, then this card is the best option for that specific purchase category. However, for other purchases, many other cards offer better benefits and rewards.

Pros & Cons

Pros

If you are a Prime member, the 2.5% cashback offered on Amazon purchases is unbeatable in terms of rewards compared to other credit cards.
The 2.5% cashback on all foreign currency transactions helps to offset the extra 2.5% fee.

Cons

It offers very little on non-Amazon and non-Whole Foods purchases, with many other well-rounded credit cards out there that offer much more.
Very limited benefits.

Product Details

Rewards

2.5% cashback on Amazon.ca, Whole Foods and foreign currency transactions IF a prime member
Only 1.5% on Amazon.ca and Whole foods and 1% on foreign currency transactions IF not a prime member
1% cashback on everything else

Insurance

Coverage

Purchase Protection
90 days
Extended Warranty
Up to a year

Benefits

Details

Car Rental Discount
10% off base rate of Avis Rent A Car and Budget Rent A Car
Trip and legal Assistance
Yes

Eligibility

Credit Score
Good
Annual Income
N/A

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