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Does Having More Credit Cards Hurt Your Credit Score?

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How you manage your credit card accounts can affect multiple factors that determine credit scores, including your payment history, credit utilization rate, average age of accounts and credit mix.

Acquiring a credit card account, using it (or not) and choosing to close it can all have significant consequences for your credit scores. Credit card activity can affect multiple factors that influence credit scores, including payment history, credit utilization rate, average age of accounts and credit mix. Heres what you should know about the effects credit cards can have on credit scores.

Having more than one credit card can help or hurt your credit score. The important thing is to know how to use them wisely.

When used wisely, having more credit cards can benefit your credit in several ways:

  • Increase total available credit – More credit cards means higher credit limits which lowers your credit utilization ratio if spending stays the same. This metric makes up 30% of your FICO score.

  • Develop your credit history by keeping your credit cards open for a long time. This shows that you can responsibly handle your credit over time. The length of your credit history is 15% of your FICO score.

  • Different kinds of credit—Real estate loans, credit cards, mortgages, and other types of credit are all good signs for your credit score. This is 10% of your score.

However, there are also risks to having numerous credit cards that can drag down your credit if you’re not careful:

  • Hard inquiries – Applying for multiple new cards in a short timeframe triggers hard inquiries, which slightly ding scores temporarily. Too many looks desperate.

  • Lower average age of accounts – Opening many new accounts lowers your average credit history age, since new cards haven’t been open as long.

  • Difficult to manage – Having many card accounts with different due dates increases the risk of late payments, a major credit score killer.

  • Higher balances – The more cards you have, the easier it is to overspend. High balances hurt your credit utilization ratio.

How Many Credit Cards Should You Have?

There is no perfect number of credit cards. It depends on your personal finances and your ability to handle your money well. However, research shows that U. S. consumers have an average of about 4 credit cards.

Many experts recommend having at least 2-3 active credit cards at one time to benefit your credit mix and credit utilization. Beyond that, additional cards may or may not be helpful depending on how you use them.

Those who can responsibly manage more credit cards can open more accounts to maximize rewards. But avoid opening multiple new cards at once, as too many hard inquiries will ding your score temporarily.

Here are general guidelines for how many credit cards may be right for you:

  • Excellent credit (740+): 3+ cards
  • Good credit (670-739): 2-4 cards
  • Fair credit (580-669): 1-3 cards
  • Poor credit (below 580): 1-2 cards (secured cards)

However, focus less on the number and more on using your cards wisely. Pay balances off monthly, avoid late payments, and only spend within your means. If you stick to good credit card habits, more accounts won’t hurt your credit.

How Multiple Credit Cards Impact Your Credit Score

Let’s explore in more detail how having multiple credit cards influences your credit score, for better and worse:

Potential Benefits

  • Lower Credit Utilization – More available credit means ability to keep utilization low. This helps your score, as long as spending doesn’t increase.

  • Credit Mix – Multiple credit cards in addition to other loan types shows you can handle different credit. Credit scoring models like diversification.

  • Payment History – Making on-time payments across several accounts demonstrates responsible habits. 35% of FICO score.

  • Length of Credit History – Keeping accounts open long term builds a strong history. 15% of FICO score.

Potential Risks

  • Lower Average Age – Opening new accounts lowers average account age, since new cards haven’t been open as long.

  • Hard Inquiries – Each application triggers an inquiry, which causes a small temporary score drop if too many accumulate.

  • Higher Balances – Access to more credit makes overspending easier. High utilization ratios hurt scores.

  • Missed Payments – More accounts with different due dates increases late payment risk. Major issue for scores.

  • Account Closures – Closing accounts can reduce total credit limit and length of credit history metrics.

Tips for Managing Multiple Credit Cards

If you have several credit cards (or are thinking of getting more), here are some tips to manage them responsibly:

  • Pay bills on time every month without fail
  • Try to pay balances in full to avoid interest
  • Set payment due dates for the same day each month
  • Create payment calendar reminders on phone
  • Leverage autopay to automate on-time payments
  • Avoid card use if you can’t pay off balance that month
  • Monitor credit utilization ratio across all cards
  • Keep oldest accounts open to benefit credit history
  • Apply for new cards sparingly, not back-to-back

The number of credit cards you have only matters in terms of how you use them. Practice good credit card habits, like paying on time and keeping balances low, and more accounts can actually benefit your credit long-term. But misusing numerous cards is a surefire way to tank your credit score fast.

does having more credit cards hurt your score

Not Using a Credit Card Can Affect Scores Too

Letting a card go unused for an extended period creates a risk that the issuer will reduce your credit line or even close your account due to inactivity. A lot of card companies will do one or the other without telling you if your account isn’t used for too long. For them, “too long” means any amount of time they choose. Its good practice, therefore, to avoid monthslong spans of inactivity on any card you plan to keep.

Using each card to pay a small recurring expense, such as a streaming subscription or gym membership, is a good strategy for keeping your cards active. Paying (or auto-paying) their bills each month also adds positive payment information to your credit reports, which can benefit your credit scores.

Keep in mind that if you cancel a credit card that you don’t use, the lender will mark the account as “closed in good standing” on your credit report, as long as you made all of your payments on time when you used the card. Its payment history will remain on your credit report for 10 years from the closing date, just as it would if you closed the account yourself. Such an entry has no direct effect on credit scores, but loss or reduction of a cards credit limit could have the same secondary impacts on your credit scores as closing the account yourself, as discussed below.

How Closing a Credit Card Can Hurt Your Credit

You may have a good reason to close a credit card account, such as getting rid of an idle card that charges an annual fee. You should be aware, however, that canceling a credit card can have negative consequences for your credit scores. Understanding the issues involved can help you anticipate and plan appropriately if you decide to close a credit card account.

Does Having Multiple Credit Cards Hurt Your Credit Score? Good or Bad?

FAQ

Is 7 credit cards too many?

There isn’t a magic number for “too many” credit cards, but seven credit cards could be too many for some individuals, depending on their spending habits and financial management abilities.

Does credit score go down with more credit cards?

The average length of your credit history will decrease – While new card accounts often lower your credit score about five points, it typically rebounds in a few months. However, if you frequently open new cards, the negative effect can add up.

What is the 2/3/4 rule for credit cards?

The 2/3/4 rule is a credit card application restriction specifically used by Bank of America. It limits the number of new credit cards you can be approved for within certain timeframes.

Does it hurt your credit to have too many credit cards?

Key Takeaways. Having a lot of open credit cards won’t hurt your credit score, but getting a lot of new cards may because the average age of your accounts will go down.

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