I’m frequently asked by the same question: How many credit cards is too many? Well, this is never an easy question to answer. Today, I received a message from one of my friends who told me that he just got approved for his 14th credit card. I think it is an interesting topic to discuss on how many credit cards is too many?
According to the article in MSN money, 1 in 7 Americans carries 10 or more credit cards. This article also indicated that the average American holds four credit cards. So it is safe to say that carrying 4 to 10 credit cards is really not to many.
As I mentioned at the very beginning, my friend Chris has 14 credit cards. Let’s see how he makes 14 credit cards.
Following is a list of the credit cards he currently has:
Blue Cash from American Express
Starwood Preferred Guest Credit Card from American Express
The Gold Card from American Express OPEN
Citi Platinum Select / AAdvantage World MasterCard
Citi PremierPass Card - Elite Level
Bank of America World MasterCard with WorldPoints
Chase Freedom Card
Chase United Mileage Plus Visa Signature Card
Amazon.com Rewards Visa Credit Card
National City Everyday Rewards Visa Card
Household Bank Platinum MasterCard
He told me that the reason why he got so many credit cards is to get the sign-up bonuses. For example, when he placed the order at Amazon.com there is a message ask him to apply for the Amazon.com Rewards Visa Credit Card which will give him $30 cash back. He then just applied for the credit card! When he heard that the Starwood Preferred Guest Card from American Express offered 10,000 bonus points, he would just apply for the credit card, use it for a while and then I will catch another credit card later. He told me that there is no negative impact on his credit score for having so many credit cards. I personally have about 12 credit cards and my credit score is very steady.
So there is no definite saying that 20 credit cards are too many. You can’t have more than 20 credit cards. There is even a rumor says that some people carry up to 50 credit cards!
Actually there are only two things that matter to your credit performance: your balance-to-limit ratio and late payments. It is obvious that the more you have your credit card, the greater the chance that you might miss a payment. A late payment will trigger a damage to your credit report. Another risk you might have is you probably will spend more money with more credit cards. If you can keep your balance-to-limit ratio very low, let’s say 30%, there is no negative influence on your credit report even you have 50 credit cards.
How many credit cards is too many?
There’s no right number of credit cards for everyone. It really depends on how much you spend and how much you can pay off. A smart tip is never carry balance on your credit cards if you have a lot of credit cards.
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December 16th, 2008 at 10:50 am
if you cancel/close a credit card account within a short time (lets say 6 months) you took it, will it affect your credit score?
January 19th, 2009 at 9:34 pm
Having a lot of credit cards will affect your credit score and borrowing power for other items, such as mortgages.
Even if you balance is zero on your cards the loan calculations take into account what the repayments would be on the credit limit if you were to start using your cards and not paying them off
April 21st, 2009 at 11:18 am
I want to open my account with http://www. wamucardschase.com how i can do?