Credit cards are great to keep in your wallet. They come in handy when you don't have any cash on hand or when you want to make big purchases. They're especially convenient when you're traveling and can provide you with some great rewards. But can you have too many credit cards? Popular financial wisdom says having too much plastic under your name can hurt your credit score. This immediately begs the question—how many credit cards are "too many"?

There are several different factors that can help you determine the number of credit cards that's right for you. Some people feel that a small number of cards—one to three—is more than enough, while others end up opening multiple cards over a short period of time. But in reality, the way you manage them and the circumstances under which you obtain them that matters more than how many credit cards you carry.

Key Takeaways

  • Having a lot of credit cards can hurt your credit score if the total amount you owe exceeds 30% of your credit limit.
  • Holding multiple cards also hurts your credit score you make late payments or if you open many accounts in too short a time.
  • Closing accounts can hurt your score.
  • You can boost your score in some cases by opening new credit cards.

How Your Credit Score Is Determined

Before we look at the basics of credit card ownership, it's important to understand how your credit score is calculated. This can help you determine whether you carry too many credit cards or the few that you have are enough. Here's a quick review of the key components of your credit score vis-à-vis the amount of plastic you carry.

  • Payment History: This is the biggest factor and counts for 35% of your credit score. Although this takes all your monthly payments from all your debt into account, your credit card payments are the biggest variable. Credit card companies are the least forgiving when payments are late and are quick to report to credit bureaus if they are tardy.
  • Debt-to-Credit Ratio: Also referred to as credit utilization, this ratio measures the outstanding debt on your credit cards in relation to your available credit—basically, how close you are to the credit limits on all your cards. Your credit utilization factors into 30% of your credit score. The ratio hurts your score if it exceeds 30%.
  • Length of Credit History: This is where people with multiple credit cards can get into trouble. Building a responsible history of on-time payments improves your score over time. People with excellent credit scores have an average age of 11 years for all of their cards, with the oldest card being 25 years old. This contributes to 15% of your overall score.
  • New Credit: Whenever you add a new credit account, it can cause your credit score to drop a few points—first when the creditor makes an inquiry on your credit report, then when the account is actually opened. New credit is 10% of your score.
  • Type of Credit: The type of credit you have counts for 10% of your score. Credit bureaus like to see how you manage debt across different types of credit accounts. Your credit portfolio ideally should consist of a mix of credit cards, retail accounts, installment loans, auto loans, or a mortgage.

Adding too many new cards when you have a short credit history reduces the average age of your credit accounts, which can drag down your credit score.

How Many Cards to Own

The number of credit cards you have and how you use them can have a direct impact on your credit score. If you're a novice credit card user, focus on building a credit history with one or two cards and paying off your balance in full each month. Adding credit cards for specific purposes such as a good rewards program or for obtaining better travel insurance can also make sense, provided they are not added within a short period of time. 

If you've used credit cards for several years, it may make sense to add a card if it has a significantly lower interest rate—or if you feel you now qualify for better terms. You may want to transfer a balance to a new card that offers a promotional low-interest-rate—some even offer 0% for new cardholders. However, you still need to focus on keeping your debt-to-credit ratio below 30%. 

3.7

The average number of cards held by credit card owners, according to Gallup



Dealing With Too Many Cards

If you think you may have too many cards, the worst thing you can do is start closing accounts without considering the impact on your credit score. Closing older credit cards can shorten your credit history, which can hurt your score.

Payment history on closed accounts eventually falls off your report, which can also hurt your score. Closing credit card accounts also reduces the amount of available credit, which can hurt your debt-to-credit ratio or credit utilization if you have outstanding balances.

It's better to leave your credit card accounts open and just put these cards on ice. if you get a warning about inactivity from the card issuer, use that card just a bit to prevent the account from being closed. You can also keep that credit card as a backup, especially if it comes with a higher interest rate and/or a higher credit limit. Keeping this one in the wings can help you keep costs down and, if it has a higher limit, can keep your spending in check.

Getting Another Card

Credit card companies still solicit people to open accounts even though they've slowed down a bit. You know those mailings you often get that tell you you've been preapproved for a card. Should you be tempted? Well, sometimes. The following are a few good reasons to acquire more cards:

  • Getting a low-interest rate 
  • Transferring a balance—especially if the new card's offering a great promo
  • Better perks, more cash-back, or more useful rewards 
  • Adding available credit to lower your debt-to-credit ratio
  • Getting a higher credit limit than you've ever had

The Bottom Line

Having a lot of credit cards can hurt your credit score under any of the following conditions: 

  • You have so many payments that you can't keep up with all them
  • Your outstanding debt is more than 30% of your total available credit 
  • You have added too many cards in too short a time 
  • You lack diversity in your credit accounts

But don’t simply start closing accounts just to reduce the number of cards you have. That can never help your credit score. Instead, leave them open and just stop using them.