All About Daily Inspirational Bible Verses

How Many Credit Cards Should I Have - Coast Tradelines

Dec 19

How Much Credit Cards Should I Have? The Intersection of Credit Cards and Tradelines Explained


One question that boggles people in the realm of personal finance is "How numerous credit cards should I own?" This question becomes particularly pertinent if you are considering the addition of tradelines to your credit score. Let's clear up this issue giving you the insights and a plan to make informed financial decisions.

The Conundrum of Credit Card Numbers: Why It Matters

The number of credit cards you carry isn't just a matter of personal convenience. It also influences your credit score. While you're aware that the right credit card can boost your credit score, you're likely puzzled as to how many you should have.

The Pros and Cons of Owning Multiple Credit Cards

Before we look at how many credit cards you're required to own before we look at the benefits and downsides of having multiple credit cards.

Advantages of Owning Multiple Credit Cards

  • If you've got multiple credit cards your credit limit might be greater. A high credit limit is useful for emergencies or large purchases.
  • Utilize credit cards with rewards or cashback programs to reduce your expenses when you purchase items on a regular basis.
  • The ratio of your credit utilization will rise. Your credit utilization ratio is a reference to the percentage of your credit available that you currently use. Credit cards with multiple accounts can boost your credit score by splitting your balances.

Disadvantages of Owning Multiple Credit Cards

  • Multiple credit cards can make you more prone to spend more than you can afford and then fall into debt.
  • It's easy to make impulsive purchases that you aren't able to afford when you have multiple credit cards.
  • Controlling multiple credit cards can require much time and effort. More so if the payment schedules change.
  • A lot of cards can result in a high rate of utilization. A high CUR can hurt your credit score.
  • Different cards offer different perks. Being too cautious with your cards can result in not gaining the many advantages.
  • On the flip side the other hand, having a lot of cards can make keeping track of payments due dates difficult. It can lead to charges for late payments as well as a damaged credit score.

Key Points to Consider When Applying for Credit Cards

  1. Differential Benefits: Look for cards that offer various perks, such as cashback, travel rewards, or low-interest rates.
  2. Annual Fees: Be sure that the card's benefits outweigh the annual fee.
  3. Interest Rates: A low APR is essential unless you'll pay off the debt each month.
  4. Credit Limit: A higher credit limit can benefit your credit utilization ratio if you don't overdraw it.

Average Number Credit Cards Should I Have

Now that we've looked at the advantages and disadvantages to owning several credit cards, let's examine how many credit cards you should have. How many credit card accounts is too much? And how many are enough?

Financial experts recommend having between 3 and 5 credit cards to have an extensive credit profile. This will provide many advantages and boosts the ratio of credit utilization.

Factors to Consider When Deciding The Number Credit Cards to Own

Many factors should be considered when deciding on the number of credit cards to have. These include:

  • The credit score and the history: Your credit score and history will determine the number of credit cards to have. It is possible to only qualify for a couple of credit cards, if have low credit scores or have a poor credit record.
  • Earnings and expenses: Your expenses and income will also be crucial. If you have a substantial income and minimal expenses, you might have more credit card accounts than those with lower incomes and higher expenses.
  • Priorities and goals for your financial life: The goals you have for your finances and the priorities will affect how many credit cards you should own. If you're looking to boost your credit score or earn rewards, you should consider having a variety of credit cards.

Recommended Number of Credit Cards Based on Different Scenarios

Here are some suggested numbers of credit cards that are based on a variety of scenarios:

  • for those with no credit history If you do not have credit history, then you may qualify for one or two credit cards.
  • For those with average credit scores: If you have an average credit score, then you could have two to three credit cards.
  • for those with high credit scores: If you have excellent credit, you may hold at least four credit cards.

How Owning Multiple Credit Cards Affects Your Credit Score

After we've examined how many credit cards you need we can look into how using multiple credit cards affects your credit score.

Positive Impact of Owning Multiple Credit Cards on Credit Score

Multiple credit cards could have a positive effect on your credit score, in a variety ways that include:

  • A higher credit utilization ratio Owning multiple credit cards can help improve your CUR. The spreads the balances on multiple cards.
  • Diversified credit mix: A diversified credit mix can help improve your credit score.

Negative Impact of Owning Multiple Credit Cards on Credit Score

Possessing multiple credit cards can cause damage to your credit score the following ways

    • Risk of missed payments and delinquencies: Owning a lot of credit cards can result in greater risk of missing payments. There is also the chance of becoming indebted on your accounts.
    • Increased credit inquiries and the opening of new accounts: Applying for multiple credit cards can lead to multiple credit inquiries and new accounts. Both of them could affect your credit score.
    • A lower average age for your account The fact that you have multiple credit cards can help reduce the age average of your accounts. This could affect your credit score.
Coast Tradelines

(347) 363-1399

1412 Broadway, 21st Fl NY, NY 10018