There is no right answer for how many credit cards you should have or how many credit cards is too many. The specifics differ from person to person, depending on how well an individual can manage one credit card, then two credit cards, and so on. So while three credit cards could be too many for one person, someone else might be able to comfortably manage seven. But that’s about where most people draw the line. The average adult has 5.6 credit cards, including 3.1 cards that can be used anywhere and 2.5 store cards.
Having several credit cards can help you save more money by allowing you to get the best collection of rates and rewards for your biggest transactions. And it can help your credit score if you keep your utilization low and your payments on time. But what you should watch out for is applying for too many cards too quickly. It’s best to not apply for more than one per year, or six months, as each application puts a hard inquiry on your credit report and temporarily hurts your score.
Here’s what determines if you have too many credit cards:
Your credit report and score. If you have a history of financial mistakes, such as missed payments or worse, you should be careful about overdoing it. Besides, it may be hard to get too many cards worth having if you have damaged credit.
Your utilizationand payment history. You don’t want to rack up more debt than you can comfortably afford to pay, or you risk carrying large balances and wasting lots of money on interest. And if you’re maxing out all the cards you have, credit card companies probably won’t want to give you additional spending power.
Company rules. Some issuers have unofficial rules regarding how many credit cards is too many for an applicant to have and still get approved for a new one. This could be an overall card limit or based on how many existing accounts you have with the issuer you’re seeking a new card from. There are lots of rumors floating around that Chase does this, for example.
You’re having trouble keeping track. Even if your credit is good and you’ve been keeping your payments current, at some point it may be hard to manage all your open accounts.
While we can’t tell you for sure how many credit cards you should have, the more data that’s at your disposal, the easier it will be to make that decision. WalletHub can help with free daily credit score updates and personalized credit-improvement advice.
What happens if you don’t use your credit card depends on which credit card you have. Some rewards cards will revoke any unredeemed points, miles or cash back you have saved up if you don’t use your credit card at all for a certain period of time – usually around 12 months. And if you don’t use your credit card for 6 months or more, the issuer could close your account. Different companies have different timeframes. That could hurt your credit standing, reducing your available credit, possibly making it seem like your credit history is shorter than it really is, and robbing you of an account that was previously adding positive information to your credit report each month. … read full answer
But not using your credit card, at least not regularly, can be a great strategy if you want to build credit but are worried about overspending. You just have to make sure your balance is $0 when you stop using your card. A credit card with no balance will get reported to the credit bureaus as being in good standing each month, with an on-time payment and 0% utilization. And that will lead to credit score improvement if you manage the rest of your finances responsibly. Still, it’s good to make small purchases, then promptly pay them off, every once in a while to avoid the downsides of account inactivity.
One thing that won’t happen if you don’t use your credit card is the issuer charging an inactivity fee. Credit card inactivity fees were banned by the CARD Act.
That being said, there’s no standard timeframe that your card can go unused. Depending on the issuer, it can range from a low of six months to more than a year.
Here’s what happens if you don’t use your credit card:
· Your issuer may decide to close your account if they think you’ve been inactive for too long. But they will often send you a notice in advance and give you a chance to use your card first.
· Some credit card rewards will expire after a certain period of account inactivity. You’ll also lose any rewards you’ve yet to redeem when your account is closed.
· If the credit card you’re not using has a $0 balance and is in good standing, positive information will be added to your credit reports each month the account stays open.
· Not using a credit card and maintaining a $0 balance will give you 0% credit utilization for that account. That’s not a bad thing, but utilization of 1% - 10% is better for your credit score.
· Your overall utilization ratio is affected anytime you don’t use your credit card. This is the ratio of the balances on all of your credit cards vs. the total available credit. When a credit card is removed from your account, it reduces your available credit, which, in turn, raises your overall utilization. Credit bureaus like to see a utilization ratio of less than 30 percent for all credit cards.
· The age of your open credit card accounts is important to credit scoring. Closing an account, especially an older one, can hurt your score.
· You will continue to pay interest on balances you charged before you stopped using the card. If your balances have been paid in full, you won’t have to send in any new payments. If you want to close your card, you won’t have to pay any fees.
· If your credit card charges an annual fee, not using the card won’t get you out of having to pay. And if you’re not getting anything out of a card that you’re paying for, you might want to close it.
In all, not using your card can still be good for your credit. And it’s far better than using your card irresponsibly. So if you don’t trust yourself to limit your spending, it may be wise to set your card aside until you have a necessary expense.
Maintaining a credit card account with zero balance will have a positive influence on your credit score because credit reporting agencies maintain information about how many credit card accounts you have, your available credit, your credit utilization ratio, whether you pay on time, and various other factors. So maintaining a credit card account with zero balance can actually be a smart strategy because it lets you take advantage of the credit building capabilities of credit cards without running the risk of going into debt. Please remember that sometimes issuers will close inactive cards after a certain amount of time, so you should know their policy on that and make an occasional purchase to avoid that.… read full answer
In order to determine exactly what influence a credit card account with zero balance has on your credit score, we advise signing up for an account with WalletHub. It’s absolutely free and you will get daily credit score updates. Good luck!
It’s best to apply for a credit card about once per year, assuming you need or want a card in the first place. And you shouldn’t apply for more than one card at the same time. If you apply more often, the repeated hard inquiries into your credit history will hurt your credit score. Creditors will also see you as desperate to borrow, making you a greater risk and less likely to be approved for a loan or line of credit.… read full answer
Every time you apply for a credit card (with only a few exceptions), the issuer will do a hard pull of your credit, which temporarily lowers your credit score. Normally, this isn’t a big deal, because your score will bounce back after a few months of responsible credit use (e.g. paying on time, low utilization, etc.). But hard pulls become problematic when there’s a bunch at the same time. The damage is more significant and lasts longer – up to 12 months, according to TransUnion. And that can wind up costing you a lot of money if you need the best possible credit score in the near future, such as if you’re going to shop for a mortgage or car loan.
So careful planning is important, in terms of both which card you apply for and when you apply. If you’re rejected for a card, one option is to wait until your credit score rebounds before trying again. And you can track your credit score for free on WalletHub, the only site with free daily updates, to see when that happens. Alternatively, you could apply for a card with lower requirements.
For example, people with limited or damaged credit may want to consider a secured credit card. They require you to make a security deposit that acts as your credit line, and this collateral gives them the highest approval odds of all credit cards. As long as you can fund the deposit and make minimum payments, your chances are decent no matter what your credit score is.
If you’re not approved for a secured card, there are other ways to get your hands on credit. For instance, you can become an authorized user on someone else’s account or try to find a cosigner to apply with.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.