Pros and Cons of Having Multiple Credit Cards in 2024 (2024)

FAQs

Pros and Cons of Having Multiple Credit Cards in 2024? ›

Appear risky to issuers: Applying to multiple credit cards within a six month period can make you appear risky to credit card issuers. Easy to overspend: The more lines of credit you have open, the more debt you could accrue.

Appear risky to issuers: Applying to multiple credit cards within a six month period can make you appear risky to credit card issuers. Easy to overspend: The more lines of credit you have open, the more debt you could accrue.

It's generally recommended that you have two to three credit card accounts at a time, in addition to other types of credit. Remember that your total available credit and your debt to credit ratio can impact your credit scores. If you have more than three credit cards, it may be hard to keep track of monthly payments.

Too many credit cards for most people could be six or more, given that the average American has a total of five credit cards. Everyone should have at least one credit card for credit-building purposes, even if they don't use it to make purchases, but the exact number of cards you should have differs by person.

Opening multiple card accounts in a short period of time can actually hurt your credit score and can also jeopardize larger financial goals like getting a low mortgage rate when buying a house.

If you pay off all your credit card accounts (not just the one you're canceling) to $0 before canceling your card, you can avoid a decrease in your credit score. Typically, leaving your credit card accounts open is the best option, even if you're not using them.

Keeping a low credit utilization ratio is good, but having too many credit cards with zero balance may negatively impact your credit score. If your credit cards have zero balance for several years due to inactivity, your credit card issuer might stop sending account updates to credit bureaus.

RULE #3: PAY YOUR BILL OFF IN FULL EVERY MONTH

The whole point of getting a credit card is to gain cashback or rewards on your everyday spending.

Key takeaways: Closing a credit card can hurt your scores because it lowers your available credit and can lead to a higher credit utilization, meaning the gap between your spending and the amount of credit you can borrow narrows. Canceling a card can also decrease the average age of your accounts.

What is the 5 24 rule? ›

What is the Chase 5/24 rule? According to the 5/24 rule, you won't be approved for a Chase credit card if you've opened five or more cards from any bank (excluding most business credit cards) in the past 24 months, even if you have an excellent credit score.

For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2023, the average FICO^® Score^☉ in the U.S. reached 715.

So, while there is no absolute number that is considered too many, it's best to only apply for and carry the cards that you need and can justify using based on your credit score, ability to pay balances, and rewards aspirations.

Consumers with 800+ credit scores have an average of 8.3 open accounts. High credit score consumers have an average of 8.3 open accounts — similar to the 7.9 we found in 2021. By generation, Gen Xers now have the most active accounts, with an average of 8.6 open accounts.

How many credit cards is too many or too few? Credit scoring formulas don't punish you for having too many credit accounts, but you can have too few. Credit bureaus suggest that five or more accounts — which can be a mix of cards and loans — is a reasonable number to build toward over time.

It's also a good idea to wait at least 90 days between new credit card applications —and it's even better if you can wait a full six months.

Applying for too many credit cards at once — or doing so randomly or repeatedly — can hurt your credit scores.

You'll have access to more credit

The percentage of the total credit you're using, also known as amounts owed or credit utilization rate, is the second-most important factor of your credit score. For every new card you open, you'll receive a new credit limit which increases your available credit.

If you have multiple cards with the same issuer, you can maximize your rewards by using different cards for different purchases -- then combine for redemptions. You might be able to transfer credit limits, and having multiple cards with one issuer will make it much easier to manage your bills.

While it's possible having two credit cards (or more) can help build credit quickly, a more reliable strategy is to focus on responsible financial habits and card management. Making on-time payments and keeping your credit card balances low can be far more impactful over the long run.