How many credit cards should you have?

Having multiple credit cards can benefit your finances, but only if you use them carefully.

If you’ve got more than 1 credit card, you’re certainly not alone. But how many credit cards should you have and what are the pros and cons of having multiple credit cards? This guide explains all you need to know.

What is the best number of credit cards to have?

There’s no legal limit on the number of credit cards 1 person can have and there’s no “best” answer either. What’s more important is that you are able to manage all your different credit cards responsibly. Different credit cards have different purposes, so you may find it useful to have more than 1 type in your wallet.

What might impact your chances of getting another credit card is your credit score and income. If you have a poor credit score, a low income and existing debt to pay off, you may find it harder to get accepted for another credit card compared to someone with low levels of debt, a high income and a good credit rating. This is because the lender may be concerned about your affordability levels.

Benefits of having several credit cards

There are several different types of credit cards, with each type designed for a different purpose. Provided you can comfortably juggle multiple credit cards, they can help you to better manage your finances and even save you money.

For example, if you’re already paying interest on existing credit card debt, applying for a 0% balance transfer credit card and moving your debt across can reduce your monthly repayments and save you paying interest for several months.

Meanwhile, if you have a large purchase coming up, taking out a 0% purchase credit card can help you to spread the cost of your spending over a number of months interest-free.

You might also want to have a rewards credit card in your wallet for any spending that you can afford to repay each month. Many of these cards offer loyalty points to be spent in certain supermarkets or retailers, cashback or even air miles. Many also come with high interest rates, so paying off your balance in full each month is important.

There are also credit cards that can save you money when you go abroad. Unlike most standard credit cards, travel credit cards charge no foreign transaction fees, which can be beneficial if you regularly travel overseas.

Finally, credit builder credit cards can help those with a low credit score or no credit history rebuild their credit rating. Just bear in mind the interest rate charged is often very high and credit limits are low.

Risks of having multiple cards

Although there are many benefits to having multiple credit cards, there are also a number of drawbacks to consider.

Perhaps one of the most obvious is that having several credit cards can encourage you to spend more than you can afford to repay. It can also be harder to keep track of your different credit cards, all of which will have different interest rates, due dates, and minimum repayments. This can increase the risk of you missing a payment, resulting in late payment fees and also having a negative impact on your credit score.

If some of your credit cards charge annual fees, holding multiple credit cards can rapidly become expensive. It’s important to consider whether you’re getting full value from each card and whether paying the annual fee is worth it.

Another issue to be aware of is that the more cards you have, the higher the risk of fraudulent use or theft. Managing multiple cards can make it harder to spot if one of them has gone missing or has been used fraudulently.

Finally, the total amount of credit available to you is something lenders look at when deciding whether to let you borrow more money. If you have a large amount of credit available to you through multiple credit cards, this can make lenders nervous about offering you more.

How multiple credit cards affect your credit score

Your payment history is one of the most important factors in your credit score. Having multiple credit cards can increase the risk of you missing payments, which will damage your credit score. But on the flip side, if you’re able to keep on top of all your payments, this can have a positive impact on your credit score. Setting up monthly direct debits for each card can help you to do this.

Having several credit cards and using a smaller portion of your credit limit on each can also help your credit score if you’re careful. This is because your credit utilisation ratio (or rate) will be lower. This is the portion of credit you’re using out of the credit limit available to you, and it’s calculated on a “per account” basis. Keeping it below 30% can have a positive effect on your credit score.

For example, let’s say you had one credit card with a credit limit of £2,000 and you were using £1,500 of it. Your credit utilisation would be 75% and this could negatively affect your credit score.

However, if you were to spread your £1,500 worth of purchases across several credit cards, your credit utilisation ratio would fall, boosting your credit score. For example, if you had 3 credit cards, each with a £2,000 credit limit, and you spent £500 on each, your credit utilisation rate would be 25% for each one.

In other words, using multiple cards will result in multiple accounts of low credit utilisation instead of one account with high credit utilisation.

Expert comment: Why I hold 3 credit cards

chrislilly profile pic
Chris Lilly

Head of publishing

I currently hold 3 credit cards. One is a rewards Amex, which I try to use for all my day-to-day spending. I have a direct debit set up to clear the full balance at the end of every month, so I've never paid any interest on it. Perhaps once a year, I'll cash-in the points towards a hotel or flight, and year-round I benefit from the card's other perks, like airport lounge access.

The next card is purely for fee-free spending while abroad. Again, there's a direct debit set up on it to clear the balance in full at the end of the month. This card doesn't see too much action, sadly! But at least there's no inactivity fee. A fee-free debit card would probably be just as good.

The final card is a 0% purchases offer that I used to replace my car last year. It's essentially acting as a loan. I don't put any other purchases on it, and as soon as it's paid off, I plan to close the account.

I wouldn't necessarily recommend holding 3 credit cards, especially if there was a risk of racking up too much debt on them. But these 3 cards have all served a valid purpose and I've used them carefully.

How many credit cards should I have to build credit?

This really depends on how well you can manage your credit cards. Having more than 1 credit card doesn’t automatically mean you’ll build credit twice as fast. In fact, if having more than 1 credit card means you’re more likely to struggle to keep up with your repayments and potentially miss some, you’ll be better off sticking to the 1 credit card and using it carefully.

However, if you are comfortable having 2 or 3 credit cards, this can help lower your credit utilisation rate which will help you build your credit score. But you must be able to make all your repayments on time. It’s also important not to apply for multiple credit cards in a short space of time as this can work against you. Try to space out applications by 3 to 6 months.

How many credit cards should I have for good credit?

If you’re looking to get and maintain a good credit score, it’s generally recommended that you have 2 or 3 credit cards. But you must be sure you can manage the repayments across all of your cards, otherwise you’ll do more damage than good. It’s also worth having other types of credit, such as a mortgage or overdraft, as lenders like to see a good credit mix on your credit report.

Can you improve your credit score with multiple credit cards?

Yes, it’s certainly possible to improve your credit score if you have multiple credit cards, but you must be confident that you can manage the different repayment schedules and ideally pay off each monthly statement in full (unless you’re taking advantage of a 0% introductory offer). Setting up a monthly direct debit can help you do this with ease.

Making your repayments on time will help improve your credit score, and having more than 1 credit card can also help lower your credit utilisation ratio which will also give your credit score a boost.

How to cancel an existing credit card

If you’ve decided to cancel 1 or more credit cards, you will need to pay off the balance in full or move it to a balance transfer credit card before you can do so. Once this is complete, you will need to contact your provider to cancel the card – you can’t just throw it away. You can either phone your provider or put your request in writing.

Once your cancellation request has been accepted, wait a few days for the cancellation to go through and then check your statement to ensure it’s up to date. You can then cut up your card through the name and number and throw it away.

How often should you apply for a credit card?

Every time you apply for any form of credit (whether that’s a credit card, loan or mortgage), a hard credit check will be carried out and this will leave a mark on your credit file. Too many hard searches in a short space of time can make you look desperate for credit, and lenders may be less willing to let you borrow. For this reason, it’s best to space out credit applications by at least 3 months, preferably 6.

Bottom line

Having more than 1 credit card in your wallet can be beneficial for a number of reasons. As well as enabling you to use different credit cards for different purposes, you’ll also benefit from a higher overall credit limit, which means you’ll have more funds to fall back on in an emergency.

What’s more, having multiple credit cards can help lower your credit utilisation rate and boost your credit score.

However, if you’re planning to apply for more than 1 credit card, it’s important that you space out your applications by several months and that you have a plan in place to meet all your different monthly repayments. Otherwise you risk damaging your credit score.

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