The average American had about four credit cards towards the end of 2020, according to Experian. "That sounds a little bit high to me," says Ted Rossman, an analyst at CreditCards.com. "While I know plenty of people that have 10 or more credit cards and manage them well, that shouldn't be your starting point."
"My personal inclination goes more to something like two cards," Rossman says. "Sometimes people think of it as a primary [card] and a backup." One card can be a simple cash-back credit card with no annual fee, "and then you have another card that really leans into your top spending category, whether it's groceries, dining, or travel."
A risk of having too many credit cards is that you won't manage them well, leading to missed payments or growing balances that can hurt your credit score. That can in turn affect your ability to secure important things like an auto loan, a mortgage, or even an apartment.
"Generally speaking, the correct number is the number of cards that you feel comfortable managing," says Nick Ewen, senior editor at The Points Guy, who has 21 credit cards.
Here are three questions to ask yourself to figure out how many credit cards is right for you.
Before determining how many credit cards to have, both Rossman and Ewen suggest you ask yourself what you can afford. "Anyone who is using a credit card regularly should always pay their bill in full, on time, every month to avoid interest charges and late fees," says Ewen.
"If you can't spend responsibly, don't have any credit cards at all," says Rossman. However, if you can spend responsibly, he adds, credit cards can offer important perks including fraud and buyers protection and rewards, and they can help you build up your credit score.
"I think ultimately it comes down to knowing yourself. If you're the kind of person that is really organized and is a maximizer and can treat this like a game and maximize your rewards in all of these different categories, that may work for you. I just think for most people, it's better to keep it simple," Rossman says.
Video by Stephen Parkhurst
One of the problems with having numerous credit cards is it "could make it easier to overspend, and it can definitely make it more difficult organizationally, so keep track of all the different due dates," says Rossman.
Another problem with having more credit cards than you can handle is the increased potential of scams and theft. "Even if you're not using cards regularly, you should be in the habit of checking them at least once a month to make sure there was no fraud," Rossman says.
Forgetting to use a credit card can lead to account closures, which can negatively affect your credit score, Ewen explains. "Some issuers will cancel a credit card after an extended period of no activity," he says. The average age of your credit card accounts is a factor credit bureaus will use when evaluating your credit score, so letting a card close may have a negative effect.
To combat this problem and keep his 21 credit cards active, Ewen sets a calendar reminder to pay for something on a credit card he doesn't often use, every six months. Then he makes sure to pay off the balance right away to avoid penalties. He also uses a spreadsheet to make sure his credit card rewards outpace the annual fee he's paying for each card.
"Some people think if I cancel a card, it's going to immediately disappear from my credit report." That's a myth. "Positive information stays on there for up to 10 years, negative information for up to seven years," says Rossman.
If you cancel your card, "what will disappear immediately is the available credit," says Rossman. Credit card utilization is an important factor bureaus use to calculate your credit score.
To calculate your credit card utilization, divide the credit you're using by your credit limit. Ideally, your credit utilization ratio will be below 30%, and most people with the highest credit scores keep it below 10%, Rossman says. That means, instead of maxing out your cards, you only use a small fraction of your available credit.
"If you have a lot of cards and you're not using them, that may actually reflect really well on your credit utilization and that's why a lot of people say to keep old cards open," he explains. But that strategy only works if you pay your cards off in full and on time each month.
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