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What’s the ideal number of credit cards one should have? Let’s Find Out

• Posted on November 11, 2022
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By Anushka Sharma

Should one have more than one credit card? Everything depends on how optimally you manage them. From cash back to travel rewards and several other offers on purchases, the wide availability of credit cards can make it difficult to limit your choices.

• Having an unlimited number of cards
• The repercussions of having too many credit cards
• Sustainable management of multiple credit cards
• When it is favourable to have just one card?

In certain circumstances, having various credit cards can be beneficial while in others, only one card can be enough to meet your requirements.

Let’s find out how having multiple cards makes a difference and how they can be combined to garner greater rewards.

Having an unlimited number of cards

Obtaining several credit cards can give you the power to spend more and greater opportunities to earn miles, points or cash rewards. However, the impact on your credit score can be one of the major concerns of having a multitude of credit cards. But owning more than one credit card can positively impact your credit score by making it simpler to keep your credit utilisation ratio low.

There is no simple answer to this question because no two individuals live in the same situation. A lot can be said in favour of having at least one credit card to enjoy a variety of benefits that come with it. The number of credit cards you should own can be determined by the following factors:

• How convenient it is for you to pay credit card annual fees
• The number of cards that can be used for making regular purchases  
• The perks and rewards you can earn from each one
• The kind of rewards you’d like to earn

The repercussions of having too many credit cards

Even having two credit cards can be more than enough if you don’t manage them well. While getting a new credit card can probably help improve your credit score by dropping your credit line utilisation ratio, applying for several cards in a short period of time is not recommended. Owning a lot of cards can lead to multiple interest charges and fees. Different cards have different policies and regulations, and keeping track of all of them can make the process a lot more complicated.

Another possible disadvantage is that you can appear risky to lenders and hurt your credit score. Even if you make all the payments on time, the mere fact that you have too many active and available credit lines can make you appear as a potential liability to the lender.

Although there is no such number that is considered too many, it is always advised to apply for and own the cards that keep your credit score, ability to pay bills and rewards expectations in check.

Sustainable management of multiple credit cards

There are a lot of situations in which you can take advantage of owning more than one credit card, and that’s especially true for the ones who are more inclined towards earning rewards from multiple cards by the same issuer.

Following are the instances when it is favourable to have multiple credit cards:

Reasons to own multiple credit cards                                   Benefits You wish to earn different kinds of rewards By having several credit cards, you can enjoy a variety of rewards (travel rewards, cashback, etc.) that aren’t possible with just one card. You are interested in credit card signup bonuses Provide multiple offers that can be equivalent to hundreds of dollars When lowering your credit utilisation is the goal Increase your overall credit line, and keep your expenditure consistent to lower your credit utilisation ratio Want a myriad of perks Attain diverse perks like airport lounge access, annual travel credits, exclusive stays at hotels and more Pairing several cards within a single rewards programme You can take advantage of each card's distinctive earning rate and bonus categories by getting multiple cards that yield the same kind of rewards. You own a business Business owners should have separate business credit cards for business-related transactions.

 

It is important to take into account that multiple credit cards can be meaningful for those who organise their finances well and pay their credit card balances in full every month.

When it is favourable to have just one card?

If you feel worried about owning more than one credit card, you are not alone. Many consumers prefer the convenience of having one credit card and one payment, especially when one card offers a multitude of benefits.

Given below are some circumstances where you might just need one credit card:

Reasons to own one credit card                                                        Benefits Your goal is to have a 0% annual percentage rate (APR) on purchases for a limited time If you are more inclined towards a 0 % APR offer instead of earning rewards, choosing one card with an extensive introductory offer can be beneficial. Planning to use a balance transfer credit card to combine debt When you don't have several credit cards encouraging you to spend, paying off your debt is much easier. Interested in earning cashback If earning cashback is the only goal, choosing a card with the highest earning rate can give you greater rewards Want to avoid annual fees You can avoid paying annual fees when you just have one credit card Want to keep your finances organised One credit card requires one credit card bill and hence, keep your finances organised.

 

The bottom line

It’s only you who can decide the number of credit cards you want to own. You can begin with one credit card and gradually expand until it can be managed sustainably without making it complicated for you to manage your finances. Furthermore, the right number of credit cards lets you enjoy maximum rewards and perks.