How many credit cards is too many?

People often ask me how many credit cards they should have.

This is even a question I’ve begun asking myself after a couple of recent sign-ups pushed my personal total to six cards. And my wife thought we already had too many!

The average American has four credit cards, according to Experian. Here’s how I assess how many is too many.

See related: Best credit cards of 2021

You may have too many credit cards if …

You can’t keep track of your accounts

If you can’t keep track of your due dates, balances and other account information, then you have too many cards. This isn’t an issue for me, thankfully. My finances are well organized, and I’m doing just fine with six cards. There’s no shame here, though – if you find more than one or two cards overwhelming, you need to know yourself.

I get a lot of value out of mixing and matching several different cards for various types of spending, but if that habit would get you into trouble with respect to late fees or debt, then you’re better off with a smaller number of cards. Maybe even zero, especially if …

You carry credit card debt

Again, no shame. About 60% of credit card holders have credit card debt, per the American Bankers Association. And the Federal Reserve says the average household with credit card debt owes $5,700.

If you have credit card debt, you’re in good company. The bad news is that this is a very expensive debt. The average account assessed interest is charged almost 17%, also according to the Fed.

A 0% balance transfer card is a great way to get out of debt at the lowest possible cost because you can avoid interest for up to 21 months. But you also have to address the behavioral aspect of what got you into debt in the first place.

Some people can dig out of debt and then stay out of debt, making them ideal candidates for rewards credit cards. Others fall right back into the high-cost debt trap. These people are probably better off avoiding credit cards entirely.

See related: Two? Seven? Twenty? How many credit cards should I have?

Your card applications are hurting your credit score

A more nuanced take on this has to do with your credit score. Every time you apply for a credit card, the card issuer checks your credit, which places a hard inquiry on your credit report. Each of these typically trims 5-10 points off your credit score for a short time (usually six months or so).

You can get into trouble when you apply for too much credit all at once. It makes you look risky and desperate. Chase is believed to follow something known as the 5/24 rule. That is, if you’ve opened five or more credit card accounts in the past 24 months, they’re not going to approve you for a new Chase card. Some other issuers appear to have similar policies.

In general, applying for a new card every six months or so should be fine, as long as it fits within your broader financial strategy. Don’t close old cards, either. That can hurt your credit utilization ratio, which is an important factor in your credit score (it’s how much credit you’re using divided by your total credit limit).

If you aren’t getting enough value from a card with an annual fee, you can avoid the fee and maintain your credit line and payment history by asking the issuer for a product change (switching to one of its other cards).

See related: Is it possible to remove inquiries from your credit report?

Compare card offers at least once a year

One other consideration in the “how many cards is too many?” debate is the role the new card would play in your overall card strategy.

Would it give you better rewards in a particular category or on all purchases? Is the welcome bonus compelling? Is there another benefit, such as a lower interest rate (if you carry a balance), or perhaps travel perks like lounge access or free checked bags on an airline you fly often?

You need to have a good reason to sign up. My latest addition, the Capital One Venture Rewards Credit Card, checked three of these boxes. I’m getting an improved return on many purchases, my introductory bonus will be worth $600 in travel (my offer is 60,000 miles after spending $3,000 on purchases within the first 3 months) and I’ll get a Global Entry or TSA Precheck membership statement credit.

I think everyone should compare credit card offers at least once a year. While some people worry about having too many credit cards, there are also risks to having too few cards (missing out on rewards, failing to build a solid credit history and so on).

See related: Which credit card should I get?

Bottom line

Inertia is a risk in and of itself. We found last year that 53 million Americans have never changed their go-to credit card, and another 16 million last switched more than a decade ago. You don’t have to be a card churner, but don’t let your cards gather dust, either.

Have a question about credit cards? Perhaps how to get out of debt? How to improve your credit score? Something else? Email me at ted.rossman@creditcards.com and I’d be happy to help.