Expert view by Maggie Gallagher
is it bad to have too many credit cards?

Getting several credit cards can undoubtedly make your debt obligations unmanageable. The number of credit cards you should have is not an easy question to answer, and in some cases, having more than one credit card can be beneficial. According to the majority of financial experts, depending on how well you handle them, having several credit cards can either help or hurt your credit score. Let’s find out what is the perfect number of credit cards a person can have.

How Many Cards Is Too Many Credit Cards?

There is no clear-cut definition of how many credit accounts are "too many." Instead, having numerous credit cards open and in use can either help or hurt your financial situation. Everything relies on how you handle your debt and use your credit cards.

For instance, distributing debt among several credit cards can truly help improve credit. This is due to the fact that one of the key elements in establishing your credit score is your credit utilization ratio, or how much of your available credit you use each month.

Assume you use $800 of your $1,000 credit limit on your credit card. If so, your credit utilization is 80%, which is much greater than the advised 30%. Instead, you could distribute that $800 among several credit cards, each with a $1,000 credit limit, to keep your credit usage score below 30% and maintain a high credit score.

There may be additional advantages to having several credit cards. By using a cash back credit card for your regular purchases and a travel credit card for your trip arrangements, you could, for instance, take advantage of particular rewards programs. Of course, if your financial situation changes unexpectedly, additional credit can be helpful.

However, the huge caveat to all future and present users is that it only makes sense to have numerous cards if you handle them responsibly. If not, you're putting yourself in a position to accumulate debt that you might not be able to manage. Instead, you could apply now for same-day personal loan to cover all financial issues without hurting your credit rating.

What Is Considered Having Too Many Credit Cards?

Credit reporting agencies advise building up to five or more accounts over time, which can include both loans and credit cards. It may be difficult for scoring models to generate a score for you if you have a small number of accounts.

For many individuals, having more than two or three credit cards can become overwhelming. However, since your credit requirements and financial circumstances are particular to you, there is no set number of credit cards that is excessive. Ensuring that you use your credit cards responsibly is crucial. Moreover, you can always get cash on Maggie Loans if your budget is tight.

Keep the following in mind when it comes to credit, particularly if you have several credit cards:

  1. Monitor your funds carefully.
  2. By making a contribution on or before the due date, you can avoid late fees.
  3. If possible, pay off the entire amount on your credit cards rather than just the minimum.
  4. To see what lenders see, regularly check your credit reports.

Does Having Too Many Credit Cards Hurt You?

Even two credit cards may be too many if you are unable to pay your expenses on time, don't need them, or don't intend to use them. While obtaining a new credit card occasionally raises your credit score by possibly reducing your overall credit line utilization ratio, getting numerous cards quickly is not recommended. Rules have been put in place by many card issuers to address this problem, which has emerged as a result of customers who try to game the system by opening a lot of credit cards to earn bonuses, then canceling their cards once they have met the spending requirements.

Multiple credit cards can result in fees and interest charges that build up in various locations. Other cards may have introductory rates for a few months before going up dramatically. Premium cards frequently have yearly membership fees. Even with relatively small balances, keeping note of everything can be challenging.

Is It Better to Cancel Unused Credit Cards or Keep Them?

The worst thing you can do is start closing accounts without considering the effect on your credit score if you suspect you may have too many cards or have some you no longer use. Your credit history may be shortened as a result of closing earlier cards, which could lower your score.

Your report ultimately loses the payment history for closed accounts, which can lower your score. Additionally, closing credit card accounts lowers your credit limit, which may worsen your credit utilization ratio if you have unpaid amounts.

It's better to simply place these cards on hold while keeping your credit card accounts open. Use that card occasionally if the card issuer sends you a notice about inactivity to avoid having your account terminated. Additionally, if the card has a higher credit limit, you can retain it as a backup.

Asking the issuer about upgrading to a better product rather than closing the account or obtain a secured personal financing outright is another option for an older credit card you no longer use and may have obtained when you were just beginning out and had few options.

The Bottom Line

Having numerous credit cards can harm your credit score, especially if you do the following:

  • You are struggling to pay off your existing debt.
  • You added far too many cards.
  • Your bank accounts are not diverse enough.

Don't just start shutting accounts to get fewer credit cards. Pay off any outstanding balances instead, and make a strategy to at least keep the oldest card. Keep it somewhere secure other than your pocketbook. Then, just occasionally use it to keep it alive while you look into your options for exchanging it for a more advantageous card from that issuer.


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