How Many Credit Cards Should I Have? The Right Answer

A question that many Americans ask is “How many credit cards should I have”. Credit cards are convenient as they allow users to pay for services and goods with credit. The convenience is even more amplified by the fact that users are allowed to spend more than what they own. But unwise spending can put you in debt. So that begs the question of whether owning more than one credit card is a good thing.

If we look at this statistic, Baby Boomers and Gen X own the most credit cards out of every other generation. With 4.23 and 4.61 credit cards per member of generation, Baby Boomers and Gen X make up the generations that use the most credit cards. But is owning that many cards good for your finances? In this article, we will give an answer to the question of how many credit cards should you have.

Some Credit Card Statistics

According to this study, there were 1,06 billion credit cards issued in the US in 2021. With a population of 328 million (including underage children), that means each person in the US owns 3.2 credit cards. The US alone accounts for 37% of all credit cards used in the world. Since banks and similar institutions issue them, we can also look at who the biggest players in the game are. As of 2021, Mastercard is the largest issuer, with more than 551 million credit cards in circulation.

But credit card usage in the US is slowly on the decline. Statistics from 2018 show that there were 1,1 billion credit cards issued in the US. A big reason why that’s the case is that the demographics are shifting. Gen Zs own the least amount of credit cards – 1.76 per person. So as Gen Zs reach the age of Millennials, the number of credit cards they use will increase.

There is also a reason why you need credit cards. While unwise spending habits can put you in debt, credit cards come with a host of advantages. If you’re interested in learning why you need one, here is our guide explaining that. So with all that said, let’s look at how many credit cards should you have.

How Many Credit Cards Should Each Person Have?

Even though there is a benefit to using credit cards, that doesn’t mean you should go out of your way and sign up for a card with every bank. Most will agree on having at least one card. This allows you to take advantage of a lot of features that these cards provide. An example is that you can spend more than what you own. As one can imagine, this comes in handy in emergencies, such as paying an unexpected hospital bill.

But should you own more than one? Well, the answer depends on a lot of factors. For example, do you need more credit cards to take advantage of extra credit lines? As many of you know, there are many credit card types and many banks issue specific cards for rewards. Some are great for accumulating airline miles, which ultimately grant you points that you can redeem for rewards. Other credit cards are better for gas rewards, grocery rewards, hotel rewards, and so forth.

With so many options to choose from, it can be easy to get lost when looking at the best credit cards to apply for. So if you have difficulties doing that, here is our credit card tool guide that will help you do just that.

How Much Is Too Much?

Since there are indeed all kinds of benefits to using credit cards, it begs the question of how much is too much. When looking to accurately answer the question of how many credit cards should you have, each person should look at it from their own perspective. Owning several credit cards won’t get you anywhere if you can’t pay your bills.

Furthermore, card issuers won’t let you take out multiple credit cards in a short amount of time. While each bank has different policies that enforce this rule, the common notion is that there is no limit to the question of how many credit cards should you have. Even so, don’t expect to have dozens as every issuer caps the number of cards you can own. With all that said, at least 14% of Americans own ten credit cards.

How Does Having More Cards Impact Your Credit Score?

Your credit score is another factor to consider when determining how many credit cards should you have. A credit score is a number that determines your creditworthiness. Here is a rundown of the credit score ranges.

• 300-499 is a credit score considered very poor.
• 500-600 is a credit score considered poor.
• 601-660 is a credit score considered fair.
• 661-780 is a credit score considered good.
• 781-850 is a credit score considered excellent.

To know if you’re a reliable or a risky customer, banks will calculate your credit score. If you’re interested in how they do that, you can read more about that here.

According to this post, the average FICO score in the US is 711. That means that Americans generally have a good credit score. According to the same post, the average FICO score in the US is constantly on the rise – it was 689 in 2010. Owning more credit cards doesn’t necessarily negatively impact your credit score, but it is a factor nonetheless. So now that we know what a credit score is, what impacts it?

Credit Score Factors

• Payment History. Your payment history affects 35% of your credit score. Missing out on payments will negatively impact your score while paying on time will impact the score positively.
• Credit Usage. This factor accounts for 30% of your credit score. Namely, how much available credit you use will have an impact on your credit score. Using more than 30% of your total available credit will negatively impact your FICO score. The more credit cards you have, the more available credit you have. This directly impacts the question of how many credit cards should you have, as more cards mean a greater limit.
• Credit History. This accounts for 15% of your credit score. Credit history is a combination of multiple factors. It takes into account the age of your oldest, newest, and the average age of your credit accounts. The average age of your credit accounts goes down every time you take out a new credit card. This works against your efforts to have a good credit score. So every time you open a new credit card, expect that to negatively impact your credit score. 
• Credit Type. This factor accounts for 10% of your credit score. When looking at credit types, there are two; revolving and installment. Credit cards impact your revolving credit, while installment credit makes up most types of loans – mortgage, personal, auto, etc.
• Credit Inquiries. This last factor accounts for 10% of your credit score. Credit inquiries essentially mean applying for new credit. This means taking out a new credit card or taking out a loan. The more you do this, the more banks and lenders label you as unfavorable. So if you want to improve your credit score, cutting back on new credit helps.

Why Do Americans Use Credit Cards?

Credit cards are heavily represented in US culture. 86% of Americans use credit cards for some purchases. More so, there is a belief in the US that going cashless is the future. Naturally, a cashless society that uses credit cards will likely mean that credit card usage will go up. Americans use credit cards for a lot of things. 

Here is a brief overview of why Americans use credit cards.

• For Rewards. We mentioned that many credit card issuers offer all kinds of rewards – grocery rewards, airline rewards, etc. This study says that 47% of Americans use credit cards only for rewards. But there is a fine line between enjoying rewards and paying interest fees for going into debt. So for Americans who are using their credit card responsibly, the prospect of using credit cards for rewards is generally beneficial.
• For Building Credit. To build good credit, Americans use credit cards to improve their credit history. But this also means that Americans aren’t opening new credit cards. 
• Financing Large Purchases. Credit cards allow Americans to finance larger purchases. But it’s important to note that many credit card issuers impose interest rates up to 25% or higher. Credit cards come with an introductory period. So if you pay off the owed balance in time, you won’t have to pay the costly interest fees.

Finishing Thoughts

To answer the question of how many credit cards you should have, each person reading this has to look at it from their point of view. Owning multiple credit cards can be beneficial for you. But if you mismanage the way you use them, it can quickly put you in a lot of debt. 

To prevent such a mistake, be mindful of things such as credit limits and payment due dates. Keep these two factors in check, and you will have no problem owning multiple credit cards for various benefits. 

Want to learn more about credit cards? Check out these articles:

• First Savings Credit Card Review
• The Best Debit Cards for Kids to Teach Them About Money
• Fit Mastercard Credit Card Review