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There are a lot of credit cards on the market, offering everything from cash back or travel rewards to a low APR. However, very few are one-size-fits-all, which is why it may make sense to carry more than one card in your wallet.
For example, your favorite low-APR card may charge a foreign transaction fee, so it wouldn’t be the best choice to bring overseas. Perhaps your cashback card may not offer primary rental car insurance coverage as a higher-end travel card would. That’s why having several cards can work to your benefit, if you’re up to the challenge of juggling multiple accounts.
In this article:
- Why it can make sense to carry more than one card
- When you should only have one credit card
- How many credit cards is too many?
- How multiple cards can help your credit score
- How multiple cards can hurt your credit score
- Maximizing rewards and benefits with multiple cards
- The bottom line
“The right credit card, used wisely, can change your life,” said Matt Schulz, chief industry analyst at CompareCards.com. “It can help make a dream vacation a reality. It can be a great short-term loan to start a business or just get through a tough time.”
“But,” he emphasized, “it has to be used wisely. If it isn’t, it can make things a real mess.”
If you’re wondering how having multiple credit cards can affect your credit score, as well as how to properly manage multiple cards, we’ve got some tips to help you out.
Why it can make sense to carry more than one card
Depending on your spending patterns, having multiple credit cards can be a great way to maximize rewards and benefits or finance for a big purchase. Here are some things that multiple cards might help you accomplish:
Earn different types of rewards. If you’re not using a card that earns cash back or travel rewards, you’re missing out on what could turn out to be extra money or travel benefits. As long as you pay off what you charge to the credit card before the end of each billing period in order to avoid interest, and if you pick a card without an annual fee, you should be earning rewards on your day-to-day spending without any additional cost. Two annual fee-free cards worth considering for rewards are the Discover it® Cash Back (for cash back) and the Capital One VentureOne Rewards Credit Card (for travel rewards).
0% for 14 months on purchases and Balance Transfers, then 11.99% - 22.99% Variable APR.
5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate, 1% unlimited cash back on all other purchases - automatically*
Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate.
- Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Redeem cash back in any amount, any time. Rewards never expire.
- Use your rewards at Amazon.com checkout.
- #1 Most Trusted Credit Card according to Investor’s Business Daily.
- No annual fee.
- Discover is accepted nationwide by 99% of the places that take credit cards.
- See Rates & Fees
See additional details for Discover it® Cash Back
Varied travel and entertainment perks. Some credit cards offer some pretty handy perks, including access to protections such as trip delay insurance and lost luggage insurance, or entertainment perks such as early access to tickets.
Save money with a 0% APR offer on a new card. Maybe you need to make a big purchase and you can’t pay it all in cash up front, but you also don’t want to pay interest by charging it to an existing credit card. If that’s the case, a new card offering an intro 0% APR on purchases for a fixed period of time can help you save money, as long as you pay off the purchase before the intro period ends. After the promotion ends, the regular APR will be applied to the remaining balance.
Similarly, if you want to get out of debt faster on existing credit card debt, you can apply for an introductory 0% APR balance transfer card.
Have a backup credit card. In general, Visa and Mastercard credit cards are more widely accepted than Discover and American Express. If the card you use for most of your purchases is one of the latter, it might make sense to carry a Visa or Mastercard as a backup in case you run into a merchant that doesn’t accept your primary card.
A backup card can also keep you from getting stuck in a situation when something happens with your primary card.
“A bank can shut down your card and/or reduce your credit limit practically any time it wants,” said Lynnette Khalfani-Cox, a personal finance expert and author known as The Money Coach. “Having one card means you could potentially need credit. [If] you only have that one card, now you’re stuck with nothing.”
Improve your credit score. If you’re approved for another credit card, that can increase your total available credit. And as long as you don’t start spending more, that available credit increase means your credit utilization ratio will go down, which is good for your credit score. Of course, a new card will also generate a hard inquiry on your credit report and reduce the average age of your accounts; you might see an initial dip in your score, though it should improve over time with responsible usage.
Bank miles, points or cash back with a generous signup bonus. One of the best reasons to sign up for a new card is to take advantage of its welcome bonus for new customers. There’s no easier way to rack up thousands of points or miles or get a chunk of cash than by applying for a new card.
When you should only have one credit card
If you have no credit history. Applying for multiple credit cards when you have a thin credit file will only hurt your attempt to build your credit score with multiple hard inquiries. Instead, identify a good starter card and use that card responsibly before you even begin to look for a second one.
2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, 1% unlimited cash back on all other purchases - automatically
Credit line will equal your security deposit of $200 or more*
No annual fee, no late fee on your first late payment. No penalty APR*
- No Annual Fee, earn cash back, and build your credit with responsible use.
- Using your secured card will build a credit history with the three major credit bureaus. Generally, prepaid and debit cards can’t do that.
- Establish your credit line by providing a refundable security deposit of at least $200 after being approved. Bank information must be provided when submitting your deposit.
- Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
- Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
- Discover is accepted nationwide by 99% of the places that take credit cards.
- Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
- INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
- Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
- See Rates & Fees
See additional details for Discover it® Secured
If you’re trying to rebuild your credit score. Again, this isn’t the time to try to get a lot of credit cards, and the odds of being approved will be slim. Instead, identify a good credit-building card to apply for, and use that card to demonstrate responsible spending and payment behavior. Take a look at our recommendations for cards for people with bad credit.
If you can’t manage multiple card accounts. There are ways to manage multiple credit cards — such as setting up autopay to ensure you don’t miss any payments — but if you find you just can’t keep track, then choose one card and stick with it. A flat rate card might be your best option.
How many credit cards is too many?
There’s no perfect number of credit cards to have, but a 2017 survey by Experian showed that Americans have an average of three credit cards. The same survey showed that 64% of Americans believe that the perfect card for them exists — but that they haven’t found it yet. That’s why it can make sense to carry several cards that reward you in different ways for your spending.
How multiple cards can help your credit scoref
One of the most commonly used credit score models is the FICO®. For your best FICO results, you shouldn’t use more than 30% of your available credit. That means if you have one card with a $7,000 limit and another with a $3,000 limit, you have a total limit of $10,000. In this example, you should always have less than $3,000 in debt on the two cards to stay under 30% utilization. FICO also considers individual card utilization, so if you have a balance of $1,500 on that $3,000 limit card, you’re using 50% of your credit, which can hurt your score.
Getting a new card will increase your total available credit, thus decreasing your utilization if you tend to carry a large balances.
How multiple cards can hurt your credit score
Another factor that affects your FICO score is the average age of your accounts. Every time you get a new credit card, the average age of your accounts decreases. For example, if you have a credit card that you’ve had for 10 years, and another that you’ve had for two years, the length of your credit history averages out to six years.
Every time you apply for a new card, your length of credit history is shortened. Plus, each card application will generate a hard inquiry when the lender checks your creditworthiness, which will knock your score down a few points. The impact of a hard inquiry lasts a year and stays on your credit report for two years.
Because of this, it’s important to be strategic about applying for credit cards. Don’t go on an application spree — only apply for cards when you’ve got a good chance at being approved, and only apply for cards that make sense based on how you spend your money.
On-time payments accounts for 35% of your FICO score, so if you do choose to have multiple cards, make sure you have a system for paying those bills on time. One way to make sure payments are made on time is by setting up autopay with your bank or card issuer.
Maximizing rewards and benefits with multiple cards
This can be as simple or complicated as you want to make it. You can make spreadsheets tracking multiple cards, or you can simply select a couple cards and use them for specific spending categories. For example, if most of your spend is on groceries each month, you could go with a combination of cards, such as the Blue Cash Everyday® Card from American Express and the Citi® Double Cash Card – 18 month BT offer. Between these two cards, you can earn the higher cashback rate from the Blue Cash Everyday® Card from American Express on groceries, and a flat rate for everything else via the Citi® Double Cash Card – 18 month BT offer.
In addition, it’s important to remember that if you want to take advantage of a perk that one of your credit cards offers, you have to put the relevant purchase on that card. So if you want to use the Chase Sapphire Preferred® Card’s auto rental collision damage waiver, you have to rent an eligible vehicle using your Chase Sapphire Preferred® Card.
After you’ve been with a credit card issuer for a while, even if you don’t use its card on a daily basis, you might get valuable offers such as periods of 0% APR.
“Sometimes you can have those extra cards as standby tools, especially when you know that the card issuer frequently offers generous perks or deals or special offers,” Khalfani-Cox said.
Finally, know your habits. If you want a travel card and you know that you fly with Delta most of the time, consider a card like the Delta SkyMiles® Gold American Express Card. If you’re looking for a card to help you earn hotel stays, and you frequent Marriott Bonvoy™ brands — including names from Ritz-Carlton and W to Courtyard and Residence Inn — consider a card like the Marriott Bonvoy Bold™ Credit Card.
The bottom line
In many cases, having at least two credit cards is smart. If one card is lost or stolen, you’ll always have a backup card. Having multiple cards can also help you maximize various rewards programs, perks and protections.
That said, if you’re just starting out on your credit journey, stick with one card for a while. Showcase a low utilization ratio and a history of on-time payments, and you can build an impressive credit score. After doing that, you’ll be eligible to apply for credit cards with more attractive perks, rewards rates, and signup bonuses.