Multiple Credit Cards: Experts Explain Pros and Cons

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Credit cards are great financial tools for numerous reasons, including building or repairing credit, racking up rewards or providing protection when traveling. But Americans seem to be using them with caution, as a new GOBankingRates survey finds that a whopping 70% of them have two credit cards or less.

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The survey finds that 28% of Americans have one credit card, 25% have two, 15% have three, just 8% have four and 9% have more than four.

Almost 16% of Americans do not own credit cards, the survey notes.

While experts’ opinions vary as to how many credit cards are really necessary, the consensus is clear: Don’t have more than you can handle, as the consequences might be detrimental. Also, if you plan on having multiple cards, be extremely disciplined in using them.

Here is more on the pros and cons of having multiple credit cards.

What Are the Advantages of Having Several Credit Cards?

There are advantages to having several credit cards, but you need to be very methodical about it, according to Howard Dvorkin, CPA and chairman of Debt.com.

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If you’re incredibly disciplined, you can rotate credit cards in such a way that you rack up signing bonuses, limited-time offers and double rewards for certain categories,” Dvorkin said. “I know a credit card expert who did just that and took his entire family to Europe — with all flights and hotel rooms covered. But he spent countless hours perfectly timing when he opened and closed his credit cards. Most of us aren’t that obsessive.”

Another advantage to having several cards is that it can help consumers achieve higher overall credit limits and maintain lower utilization rates.

“Having access to additional cards can also provide consumers flexibility if they need to make a large purchase and don’t have sufficient credit limit available on their primary card,” said Charlie Wise, senior vice president and global head of research and consulting at TransUnion.

Wise notes, however, that the goal for consumers is to have sufficient credit limits to be able to support their normal monthly credit card spending while keeping their total utilization rate — the balance compared to credit limit — on all cards under 30%.

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Another benefit is that consumers can use different credit cards for different purposes, enabling them to better budget, plan and organize their finances.

“There are some people who treat it like a game and mix and match many different cards and optimize every dollar they spend — and that’s great as long as they’re able to pay in full and avoid overspending and late payments,” said Ted Rossman, senior industry analyst at CreditCards.com. “A multi-card strategy can lean into many different spending categories; for example, you might have a card with great dining rewards and another that prioritizes groceries and others for travel [and/or] gas.”

In addition, most consumers with multiple credit cards in their wallets have a primary or preferred card that they use for the majority of their purchases, based on the card features, including cash back on purchases or other rewards, TransUnion’s Wise said.

“Some consumers may shift their spend across cards depending on the purchase type,” he said, “using one card for everyday purchases that they intend to pay off each month and another for large purchases like vacations or large ticket items that they intend to pay off over time.”

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What Are the Risks of Having Multiple Credit Cards?

In addition to not being disciplined enough to keep track of your balances, payment due dates and fees, experts say there are also other risks associated with having several credit cards.

According to the GOBankingRates survey, 21.5% of Americans’ primary purpose for using their credit cards is to build or repair credit, and 41% say they are actively trying to improve their credit scores.  

Against this backdrop, however, one unintended consequence of having several cards — and the most crucial one — is that it can have the inverse effect and negatively impact your credit score, if you forget or can’t make one of the payments, according to Mark Reyes, senior manager of financial assistance at banking app Albert.

“Having too many credit cards may impact your credit score, specifically through the credit mix factor,” Reyes said.

The sentiment is echoed by several experts, including Jason Vissers, a credit card analyst at MerchantMaverick.com, who said having too many credit cards could make you too eager to take advantage of your newly available credit and make unnecessary charges.

In turn, Vissers said, this can leave you “struggling to keep up with your payments, in which case your credit utilization ratio — and therefore your credit score — will be hurt, not improved, by your decision to take on multiple credit cards.”

“You’ll also have to keep up with the differing payment due dates, minimum payment amounts, interest rates and rewards schemes carried by your various credit cards,” Vissers added.

Albert’s Reyes also noted that some rewards cards require annual fees and, if you don’t use the cards enough, it just may not be worth keeping them. In addition, he recommends taking note of their underutilized benefits.

“Take the time to understand each of your card’s benefits,” Reyes said. “For example, your travel rewards card may offer you more than just points. Some cover your Global Entry fees or annual subscription fees on delivery services, such as DoorDash. Staying on top of multiple credit cards takes work.”

Of course, increasing the number of credit cards may increase the temptation to take on additional debt.

“If the credit card user cannot pay off their entire balance every month, the consequences can be devastating,” said Tomas Campos, co-founder and CEO of Spinwheel.

“The average interest rate charged to credit card debt will soon pass the all-time high of 19%,” Campos said. “At those rates, if you have a typical credit card balance of around $5,500 and only pay the minimum, it will take you more than 16 years to pay it off and cost thousands in additional interest.

“Lastly, more cards mean that there is more to stay on top of. It’s essential to monitor your balances and statements for budgeting purposes and to catch fraudulent transactions.”

Ideally, How Many Credit Cards Should You Have?

According to several experts, having two or three credit cards is the sweet spot for responsible borrowers.

“This allows you to have one credit card dedicated to cash-back rewards and one to travel rewards.” Reyes said. “Anything more than three credit cards may become tough to manage and keep track of.”

According to him, if you are just starting out with credit cards or are rebuilding your credit, having just one credit card may be ideal. It will allow you to build up a solid payment history and usage with one card, which may help your credit score in the long run.

MerchantMaverick.com’ s Vissers agrees, saying that for the purposes of establishing your credit profile consider having at least two credit cards, especially if you have few or no other loans or debt accounts open.

“Beyond that, it depends,” Vissers said. “If your spending is concentrated on certain things — groceries, gas, travel, etc. — that rewards credit cards tend to focus on, you might consider getting different rewards cards for different purposes — one for fuel, one for flights and hotels and so on.”

Finally, most experts agree that no matter how many cards you have or intend to have, you should be on top of the balances.

The most important thing is to have a plan and budget for your cards,” Campos said. “Track your spending and avoid paying interest as much as you can.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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