Cardholders who only have a few cards often wonder how many credit cards you can have. The answer is not as many as you want but as many as you can get approved for. Whether you love the cards for their rewards, interest-free financing or for quick cashback offers, there is a limit on the number of cards you can own. Not to forget, too much of anything can be bad!
So, how many credit cards can you have?
As Many As You Want!
A credit card issuer will never look at the number of accounts you already have before accepting or rejecting you as an applicant. However, other factors like credit score, total income, debt, and credit history is taken in to account during the assessment. Having too much available credit is also not a problem. The large number of credit cards can be difficult to manage but they do not affect the cards you apply for in future.
There is another way to look at this! Remember that having too many cards is much different than having large number of cards with pending balances. In this case, it is highly like that your request for new ones will be rejected because the report will show that you have too much debt.
Fun Fact! “The largest collection of valid credit cards recognized by the Guinness World Records is held by Walter Cavanagh of Santa Clara, California, who has amassed a staggering 1,497 cards.”
Or Maybe Just Few
There is no limit on how many credit cards you can have but if you think one particular issuer will be okay with giving you unlimited amount of credit then you are sadly mistaken. It is possible you will be a denied a card when you already have too much plastic from the same bank. Makes sense?
Let us break it down for you. A particular bank often has a limit on the total amount of credit they are willing to offer you. Let’s say this limit is set at $25,000. The rewards and perks of most the cards here looked too good to say no to so you already have a couple of cards from this bank and have reached the credit limit. Now, if a new credit card is introduced and you apply for it, the application might be rejected not because you have to many cards but because you have touched the limit for the bank. In most cases, you can apply for a product change. This feature would let you close one of the account and open a new one in its place.
How Many Credit Cards Can You Have? It’s Up To You!
Whether you want to own 2 credit cards or 200 depends on personal needs. The number of cards you need can vary considering where you stand financially. Here are few instances:
You Are Recovering From A Bankruptcy
In this case it is better if you start with just one card and build a good credit history by making all the payment on time and in full. Netica Heard, a financial analyst from Chicago says that being new to credit cards or dealing with poor score is a learning phase in which consumers should stick to just one card until they develop all the required “good habits”.
You Can’t Say No To The Reward Programs
Who wants to invest in cards that are not offering any rewards? Not many of us! In fact, it is advisable to go over their reward programs before you apply for any so you choose the one most suited to your pattern of purchases and expenses. Even if you aim to keep the cards with best reward programs, it is better not to keep ore than 5. These can efficiently cover different perks such as cashback, sign-up bonuses, extra miles etc.
You Have A Plan Of Making A “Huge” Purchase
Well, in this case just stick to the plastic you already have. Applying for a new credit card can result in a hard inquiry. This will lower your credit score by a few points. If you plan on buying a new house or a car, you should avoid such an inquiry to keep the score in the best possible shape.
Your Aim Is To Improve Credit Score
Again, there is no need to opt for a new credit card. If you thought a new account will do good to your score, this plan can backfire quicker than you imagined. Initially, it will most definitely lower your score because of the inquiries.
Why Is It Better To Set A Limit On How Many Credit Cards You Can Have
Now you know that you can open as many credit card accounts as you want. But, is it a good idea? Not entirely! It is possible but not always a good idea to sign up for every card offer that you find attractive.
Did you know? “According to data compiled by TransUnion from the first quarter of 2017, the average number of credit cards per person in the US is 2.69.”
First of all, managing your wallet can prove to be a hassle when you have to look out for too much plastic. Furthermore, it can also be difficult to keep a track on all the pending payments. This is not an issue that you should take lightly. Why? Because payment history does account for 35% of total FICO score.
Secondly, you might end up with high credit utilization ratio if you use all the available credit. As the guidelines for maintaining high credit score indicate, it is never a good idea use more than 30% of the total credit at any point. This can put you at a high risk of damaging your credit score.
How Can You Maintain A Good Score When You Have Too Many Credit Cards
The best you can do for the credit score is to avoid having too many cards at the first place. It is always advised to only apply for those that are needed. You don’t need all the rewards and sin-up bonuses! We are sure you can survive without a few.
Nonetheless, if you already have too much plastic in your wallet there are few things you can do to manage it better. We suggest you start keeping a calendar, preferably a digital one on your mobile, to avoid missing out on any payment date. Also, always stick to your budget so you never end up spending more than the utilization ratio.
The Bottom Line
There is not limit on how many credit cards you can have. However, the issuer can set a restriction on the amount of credit it will offer you. This shows that number of cards is not the problem! However, sticking to limits while using and applying for them can help you keep your credit score in good shape.