How many credit cards should you have?

Having more than one credit card is a personal decision and one that shouldn’t be taken lightly. The fact is, having multiple cards requires you to keep track of several balances, monthly payments and due dates, which makes it easier to overspend or fall behind.

There are other considerations to remember with multiple cards as well, such as whether you’re paying several annual fees, and whether the cardholder perks you receive are even worth the trouble.

At the end of the day, the right number of credit cards varies from person to person and will depend on how you use credit and the cardholder perks you want. If you’re thinking about picking up a second, third or fourth credit card and wondering if it’s worth it, read on to learn everything to consider first.

Should you have multiple credit cards?

Before you apply for another credit card, it’s important to remember the benefits you can get from having just one. For example, having one credit card makes it considerably easier to track your spending throughout the month since you can log in to just one account and look at any time. Having one card can help you rack up considerable rewards on your spending, particularly if you use your card for most regular purchases and bills throughout the month.

On the flipside, having multiple credit cards can help you accomplish other goals. For example:

• Signing up for multiple credit cards can help you earn several credit card sign-up bonuses.
• Having multiple credit cards can help you earn more rewards in certain spending categories.
• Carrying more than one type of credit card can help you earn different types of rewards, whether that’s cash back or points or miles in a hotel or airline loyalty program.

How many credit cards should you have?

Before you decide how many credit cards you should have, you should think about what you really want the most — simplicity or the chance to access more rewards and cardholder perks.

The following scenarios highlight situations in which you may want one card or several depending on your needs.

You want to earn different types of rewards

Maybe you’re someone who wants to earn airline miles as well as cash back, or hotel points, airline miles and cash back on certain types of purchases. In this case, having a few different credit cards can help you earn several types of rewards and diversify your earning potential.

You want to gamify your rewards experience

Having multiple credit cards can also help you maximize your rewards on certain types of purchases. For example, you could get one cash back credit card that offers more points on groceries and gas, then another that gives you bonus points for airfare, hotels and other travel purchases you make.

You want to access a broad selection of cardholder benefits

Maybe you want several different types of cardholder benefits that don’t necessarily come with a single card. For example, you could pick up a cash back credit card that has consumer protections like extended warranties and purchase protection against damage or theft, then a travel credit card that offers auto rental coverage, trip cancellation and interruption insurance and other travel-related perks.

You want access to more than one credit card network

If a merchant doesn’t accept cards from your network (more common with American Express and Discover cards), your network is experiencing a problem processing charges or one of your credit cards is inexplicably denied when you go to make a purchase, it can help to have a card from another credit card network you can use. This is especially true when you’re traveling away from home and may not have easy access to cash or an ATM.

You’ve had trouble tracking your spending in the past

If you’ve had trouble with credit card debt in the past, having just one card may leave you better off. With only one credit card balance to keep track of, you can keep a close eye on how much you owe and reduce your chances of paying your bill late.

You only want to earn cash back

If you’re someone who only wants to earn cash back on their spending, then having more than one credit card may not make any sense. In this case, you’re likely better off with a cash back credit card that offers the highest rate of rewards you can find on everything you buy.

You’re new to credit

Credit newcomers who are first learning the ropes are usually better off having one credit card until they get the hang of it. After all, having one card makes it possible to add depth to your credit history and build positive credit habits without falling into financial traps like overspending and long-term debt.

What to consider with multiple credit cards

If you’re finding you are attracted to the benefits of having more than one card, make sure you position yourself for success. The following tips can help you get the most out of multiple credit cards while avoiding the biggest pitfalls:

• Check in with your spending at least once per week. To successfully juggle several cards, you’ll need to know approximately how much you have spent on each one at all times. Checking each account once per week can help in that respect.
• Consider using a budgeting app. You can also use a budgeting app to track all of your spending and purchases in one place. The Mint app is a good free option that allows you to connect your credit cards and other accounts.
• Keep your credit utilization below 30 percent at all times. If you want your credit score to be in good shape, you should avoid having a credit utilization ratio that’s over 30 percent across all your cards. This means that, for every $10,000 in available credit you have, you should owe $3,000 or less at all times.
• Avoid overspending to earn more rewards. Finally, make sure having multiple cards doesn’t entice you to spend more than you planned. This tip is especially important when you’re pursuing several credit card sign-up bonuses and you need to hit several minimum spending thresholds at once.

Bottom line

How many credit cards you should have doesn’t really matter. What’s important is that your cards offer you the benefits and rewards that best meet your needs,= (which can change over your lifetime). And, of course, you need to be sure you’re not juggling so many cards that you can’t keep track of all the payment due dates.