How Many Credit Cards Should I Have?

When it comes to managing your finances, one common question is, "How many credit cards should I have?" While Americans have an average of 3.9 credit cards per person,¹ the answer to this question varies based on individual circumstances, financial goals, and spending habits. This guide will help you navigate the factors to consider when determining the right number of credit cards for your situation.

5 factors to determine the right number of credit cards for you 

1. Assess your financial goals

If your goal is to maximize rewards, having multiple credit cards can be beneficial. Some cards offer points, while others offer cash back or travel miles. By diversifying your credit card portfolio, you can take advantage of different reward structures. For example, a card that offers high cash back on groceries can complement one that provides travel points on airfare. 

However, if you're planning a significant purchase, such as buying a car or a house, you might want to limit the number of new credit applications. Each application results in a hard inquiry on your credit report, which can temporarily lower your credit score. It's crucial to maintain a high credit score for favorable loan terms and interest rates.

2. Consider your spending habits

Analyze your spending habits to determine the types of expenses you incur most frequently. If you spend a lot on dining out, a card with rewards for restaurant purchases would be advantageous. Conversely, if you frequently travel, a card with travel rewards and perks like airport lounge access might be more suitable.

How you manage your current credit cards is another consideration. If you can consistently pay off your balances in full each month, adding more cards for additional rewards can be beneficial. However, if you struggle to manage payments, adding more cards could lead to increased debt and financial stress.

3. Impact on credit score

Your credit utilization ratio, the amount of credit you're using compared to your total available credit, plays a significant role in your credit score. Having multiple credit cards can help lower this ratio – as long as you maintain low balances. Ideally, aim to keep your credit utilization below 30%.

The age of your credit accounts also affects your credit score. Opening multiple new accounts in a short period can reduce the average age of your credit history, potentially lowering your score. It's essential to strike a balance between new and old accounts to maintain a healthy credit history.

4. Convenience and security

Having multiple credit cards means keeping track of various due dates, reward programs, and spending categories. If you're organized and can manage this complexity, multiple cards can be beneficial. If not, it might be better to limit the number of cards to avoid missed payments and potential fees.

However, multiple credit cards can also provide a safety net in case of fraud. If one card is compromised, you have other cards to use while the issue is resolved. However, be vigilant about monitoring all accounts for suspicious activity.

5. Diversifying credit lines

Credit scoring models consider the variety of credit types you have. Besides credit cards, installment loans like car loans or mortgages also contribute to your credit mix. Diversifying your credit lines can positively impact your credit score.

There’s no one-size-fits-all answer to how many credit cards you should have. The optimal number depends on your financial goals, spending habits, and ability to manage multiple accounts. Whether you’re aiming to maximize rewards, prepare for a major purchase, or improve your credit score, consider these factors carefully. 

General Electric Credit Union’s (GECU) suite of credit cards has something for everyone. Earn unlimited cash back with our Gold card² or earn points with our Visa Signature®³ or Platinum cards.⁴ Apply for one online and start earning on the purchases you were going to make anyway!