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How many credit cards should you have?

Here’s how you could determine the optimum number of credit cards to have at any one time.

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Peter Stephens
Having held various senior management positions in the manufacturing sector, Peter founded his own manufacturing company in 1996. This was subsequently sold in 2007. Meanwhile, his passion for investing (which began during the privatisations of the 1980s) remains strong and he couples this with writing for The Motley Fool as a Contractor. His investment style is value-oriented; focusing on company fundamentals, as well as assessing the strength and presence of a competitive advantage. While above-average growth prospects remain very attractive, a greater focus on dividends has crept in since Peter became a part-time retiree in 2007.
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In the UK, it’s common to own a credit card or two. But just how many credit cards should you have? And is there such a thing as having too many cards? To answer these questions, here’s a look at the pros and cons of owning multiple credit cards, and some tips for figuring out what the ‘right’ number of cards might be for you.

Should you have more than one credit card?

For many people, it makes sense to have more than one credit card.

However, you shouldn’t take out extra credit cards unless you know you can manage the repayments. You should also give your credit history some thought – overstretching your finances could damage your credit score over time.

Advantages of having multiple credit cards

There are three main advantages of having more than one credit card:

  1. Access to a range of perks –  different types of credit cards offer varying benefits, such as cashback and 0% balance transfers, so having more than one card lets you access a range of perks.
  2. It can build your credit score – taking out multiple credit cards can help you build your credit score, which is great if you don’t have much credit history and you want to apply for loans such as mortgages in the future.
  3. Financial security – an extra credit card gives you some financial security if you need to purchase something essential at short notice and you don’t have an emergency fund to draw from.

Disadvantages of having multiple credit cards

There are three main drawbacks to having more than one credit card:

  1. It’s tempting to overspend – it’s easy to lose track of your spending if you have multiple credit cards on the go, which means you could overstretch your finances.
  2. It can get expensive – running too many credit cards can be expensive, depending on the annual fees you pay. Some credit cards come with high interest rates, too.
  3. It’s not as easy to track spending – you might find it hard to track your repayments when you have multiple cards to manage, so there’s a chance you could miss a payment by mistake.

If you opt for multiple credit cards, you should set a budget and track all your payment dates so you stay in control of your finances.

How does having multiple credit cards affect your credit score?

Having multiple credit cards can either boost or lower your credit score, depending on your circumstances.

Say you have two or three credit cards. You don’t overspend, you pay down your balances regularly, and you never miss a repayment. Over time, using lines of credit responsibly can boost your credit score.

On the other hand, say you overspend and you only make the minimum repayments each month. Or, maybe you’ve missed a repayment or two. Your credit score may drop as a result. This is why it’s crucial to only take out as many lines of credit as you can comfortably afford. Otherwise, you could struggle to manage your debt.

Are you thinking about closing credit cards you don’t use? It’s best to keep your accounts open while you shop for new credit cards because closing a line of credit can lower your score in the short term.

Can you have two of the same credit card?

Well, that depends on how you define ‘same’.

It’s unlikely that you’ll get two identical credit cards from the same bank. However, there’s no reason you can’t hold two travel credit cards, or two 0% credit cards, if you weigh up your options and decide these cards offer you the most value. So, in that sense, you can have two of the same ‘type’ of credit card.

To be clear, there’s no legal limit on how many credit cards you can have. That said, some banks or card companies won’t let you hold more than two credit cards with them at one time. Check with your credit card issuer if you’re unsure what their policies are.

How many credit cards is too many?

There’s no right answer to this question. Any number of credit cards can be too many if you can’t afford to pay your monthly payments or don’t plan to use them responsibly.

With that said, if you’ve weighed up your options and personal circumstances, and if you think having multiple credit cards is right for you, they can be a great tool.