Is It Bad to Have Too Many Credit Cards?

Having multiple credit cards can seem tempting. The rewards, sign-up bonuses, and increased spending power are appealing. But at what point does having multiple credit cards become problematic? When does opening that new card go from being beneficial to harmful? In this comprehensive guide, we’ll analyze the pros and cons of having numerous credit cards and provide tips for managing multiple accounts responsibly.

How Many Credit Cards is Too Many?

There is no magic number for how many credit cards are too many. The ideal number of credit cards depends on your financial situation and ability to manage accounts responsibly Here are some factors to consider

• Depends on how much money you make, you can pay off a certain number of credit cards each month. It may be enough to have just one or two cards if your income is low. Higher earners can likely manage more accounts.

• Organization – Can you stay organized and keep track of payment due dates for multiple accounts? Missing payments can negatively impact your credit score. Those who tend to forget due dates may want to limit cards.

• Spending Habits – Your spending tendencies also matter. If you struggle with overspending, limit cards to avoid temptation. More cards may work for you if you always pay off your balances in full.

• Credit Score Goals: Your credit score is based on how many accounts you have. Scores can go down if there aren’t enough accounts, but scores can also go down temporarily if there are too many new accounts.

• Future Plans – Upcoming plans, like financing a car or home, may influence your ideal number of cards now. Too many new accounts can make lenders cautious.

As a general guideline, aim for no more than 3-4 credit cards as a comfortable limit for most people. But pay attention to your unique situation.

Is There a Credit Card Limit?

There is no credit card limit imposed by issuers. You can have as many credit cards as you qualify for and choose to open. While 10+ cards may raise issuer concerns, there are no rules limiting consumers to a certain number.

Your credit score does indirectly influence how many cards you can obtain. After opening several new accounts, issuers may begin denying applications for additional cards due to:

• Too Many Inquiries – Applying for multiple cards in a short timeframe triggers hard inquiries on your credit report. Too many inquiries can signify credit risk to issuers.

• Insufficient Credit History – Opening many new accounts at once can decrease your average account age, also elevating risk perception.

• Overextended Credit—If you have a lot of credit available on a lot of cards, issuers may be hesitant to give you more credit.

So while no strict limit exists, at a certain point your credit profile will make qualifying for more credit difficult.

Pros of Having Multiple Credit Cards

Utilized responsibly, there are advantages to having several credit cards:

• Higher Credit Limit – Multiple cards means higher total borrowing capacity, which helps keep utilization low.

• Access to More Rewards – Each card offers unique rewards for spending. More cards = more rewards opportunities.

• Improved Credit Mix – Having different account types (e.g. revolving and installment loans) positively influences credit.

• Backup Payment Method – In case a card is lost/stolen, other accounts provide spending flexibility.

• Chance to Earn Sign-up Bonuses – Opening new cards can bring lucrative one-time sign-up offers.

• Special Financing Offers – Issuers sometimes provide special 0% intro APR offers on new accounts.

For maximizing rewards and credit score optimization, having several cards (when managed prudently) can be advantageous.

Cons of Too Many Credit Cards

On the other hand, having too many credit cards can create problems:

• Difficult to Track Payments – Keeping track of numerous payment due dates increases late payment risk.

• Higher Chance of Going Into Debt – Access to excessive credit makes overspending and debt more likely.

• Credit Score Damage – Too many new accounts and hard inquiries can lower credit scores temporarily.

• Higher Fraud Risk – More accounts means more vulnerability to fraudulent activity and identity theft.

• More Fees – Multiple accounts make you liable for numerous annual, foreign transaction, late payment, over limit fees, etc.

• Account Clutter – Keeping track of statements, points, benefits for tons of cards creates clutter.

The convenience and perks of multiple accounts must be weighed carefully against the drawbacks. It’s a balancing act.

Tips for Managing Several Credit Cards

If you already have multiple credit cards or are considering acquiring more accounts, here are some tips for keeping everything under control:

• Automate payments to avoid late fees and credit damage. Set up autopay through your issuer’s website.

• Use a calendar app to schedule payment due dates for each account and set reminders.

• Consolidate points/miles earned into one or two loyalty programs to avoid losing track.

• Put routine spending on a single card to simplify tracking. Use other cards just occasionally for the perks.

• Review statements closely every month to verify legitimate purchases and identify suspicious activity immediately.

• Consider account consolidation by contacting issuers to close newest/least used cards if becoming unmanageable.

• Limit card applications to reduce hard inquiries. Wait at least 6 months between applications for best approval odds.

With prudent organization and discipline, numerous credit cards can be effectively managed to gain rewards while avoiding drawbacks.

Closing Multiple Accounts

If you want to pare down credit cards, consider these ramifications of closing accounts:

• Closing newer accounts or cards with the highest limits tends to have the most impact on credit scores. Keep your longest established accounts open.

• Closing a card will lower your overall credit limit, which could increase your credit utilization and decrease your scores.

• Length of credit history also factors into scoring. Closing your oldest accounts shortens your length of positive credit history.

• If closing accounts with annual fees, be aware you often need to cancel within 30 days of the fee posting to receive a refund.

Aim to close your newest accounts first, and keep older, large limit accounts open to minimize credit score impact. In the months ahead, your scores should gradually recover from account closures as your profile stabilizes.

Signs You Have Too Many Credit Cards

Here are some signs that signal you may have exceeded a healthy number of credit cards:

• You are spending above your means and relying on credit cards to pay everyday expenses.

• Minimum payments on all your accounts are difficult to make each month.

• You’ve applied for multiple cards recently and been denied due to too many inquiries or insufficient credit history.

• You missed a payment due date or paid the wrong account by accident.

• You lost track of rewards points on an account or failed to use them before expiration.

• Statements contain mysterious transactions you don’t recognize.

• You are overwhelmed trying to keep track of payment due dates and account details.

If you are experiencing any of these issues, it may be time to consolidate your credit cards and streamline spending. Don’t take on more accounts than you can successfully monitor.

The Verdict on Numerous Credit Cards

At the end of the day, there is no objectively perfect number of credit cards for everyone. You have to self-reflect on your unique situation. For those with solid financial habits, multiple cards provide upside. For those more vulnerable to debt traps, a few accounts are safer.

Aim for a manageable number of credit cards that provide payment flexibility and valuable rewards without tempting you into spending beyond your means. The ideal quantity will depend on your lifestyle, spending tendencies, and financial diligence. With mindful monitoring and smart practices, you can make numerous accounts work optimally.