How Many Is Too Many Credit Cards?
When you think about credit you probably think about credit cards. One of the most common questions people ask is how many credit cards should one person have? The answer is a little complicated.
How many credit cards is too many? Unfortunately there is no definitive answer. Number of cards isn’t what damages credit necessarily. You could have a bunch of completely empty cards that you never use and have perfectly fine credit and you could have no cards and terrible credit! It all depends on how many you use, how often you are opening new cards and how much you owe on each one.
Can I Have Too Few Cards?
Having too many credit cards, as well as too few can impact your credit. If you don’t have any credit cards then your credit won’t reflect a good amount of debt diversity and your score will not be as high. It is good practice, even if you aren’t someone who uses credit cards a lot, to have one card you use occasionally so that you can show you have good credit habits on your credit report.
If this applies to you, get out there and apply for one credit card with no annual fee and use it on occasion paying off the balance in full each month. This will build up your credit without saddling you with debt you may accidentally forget about.
Can I Have Too Many Cards?
Likewise too many cards can impact your score with repeated hard inquiries over a short period of time. If you have a bunch of cards on your account you’ve never closed over 20 years then that’s fine! Opening a bunch over a short period of time can be detrimental because each application requires an inquiry to your credit which will leave a small impact.
If you have many cards the key is only using a few of them. The more cards you use the greater the chance you will accidentally miss a payment or spend beyond your means. Having a few cards that are left completely empty and never used is completely fine and works to your advantage as far as credit utilization as well as establishing long-term lines of credit. It is good practice to not close old credit card accounts in general.
But I Need A Number To Shoot For!
According to FICO their customers with the highest credit scores have an average of 7 credit cards on their record, including closed accounts. You don't necessarily need to have 7 cards on your record but this shows that many people are financially stable with more than one or two cards, which should make a lot of people breathe easier.