How Many Credit Cards Are Too Many?

The average American has two to three active credit cards at any given time. But some credit card users are far from “average”: From the seasoned pro who has one for miles, one for points, and one for every major retailer they frequent to the credit card avoider who has one for emergencies only that they never touch, and everyone in between. Multi-card carriers may say you’re not taking advantage of all the perks if you only have one, whereas emergency-only spenders may treat anyone with more than one like 1,562-credit-card-and-Guinness-Record-Holder Zheng Xiangchen. So, who’s right here? It’s not so simple. The fact is, there are both pros and cons to having more than one credit card. Let’s examine them both: 

  • Pros
    • Your Credit Score Can Get a Boost- Your credit score is determined by five factors: payment history, length of credit history, types of credit, amounts owed, and new credit; the last two of which account for 30 percent and 10 percent of your score, respectively. So, when you open a new card, your “available credit” increases by the amount of your credit limit (minus what you use) and your score increases just for opening a new account.
    • Rewards, Rewards, Rewards- Many credit cards offer more than greater financial flexibility. From cash back and airline miles to cash back and rewards like discounts, early-bird entertainment tickets, and gift cards, there are a lot of perks to rewards cards, like Suffolk’s MasterCard® Rewards, which gives you 1 percent back for every dollar you spend.
  • Cons
    • Your Credit Score Can Take a Hit- Yes, it can be a pro and a con! While your credit score won’t be negatively affected if you manage your cards responsibly and keep your balances low, the actual act of opening multiple cards in a short period of time can. Credit card applications are considered “hard inquiries,” which can harm your score and will remain on your credit report for two years.
    • Less Financial Accountability- The average American has $6,028 of credit card debt, with the average New Yorker owing slightly more at $6,317. Why? Because simply put, it’s easier for many people to spend money that doesn’t immediately affect their tangible financials. Someone with $100 in their pocket may have a hard time justifying a $50 purchase, but someone with a $10,000 credit card limit may see it as just a drop in the financial bucket. Financial freedom to spend money on things you otherwise can’t afford can be dangerous to borrowers who can’t handle the responsibility.

Now that you know the pros and cons of having more than one credit card, it’s time to decide what works best for your personal financial situation. If you decide opening a credit card is the right decision for you, make sure it’s from a lender you can trust and has the perks and low-interest rates that give you the most bang for your buck.

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