Is it better to have one credit card or many credit cards?

SoFi Two Sides: Using Multiple Credit Cards, or Just One?

In this installment of our Two Sides series, two SoFi members pick an end of the spectrum—on one, using a single card, and on the other, using multiple cards. They explain their reasons why, and the advantages of each.

Wallets bulge with them. Mailboxes are stuffed with offers for them. Banner ads are covered with them. Yep—credit cards are everywhere.

In the United States, we use them wholeheartedly. Seventy-six percent of Americans own a card; in fact, most have many, with a nationwide average of 3.4 cards per person. Statistics released by the New York Federal Reserve reveal that as of Q3 2016, Americans have $747 billion in unpaid credit card balances. But those who haven’t yet reached their credit limits can rest assured—there’s an untapped $2.52 trillion in additional credit just waiting to be spent.

But have we gone too far? In the FOMO-fueled drive to wring every last mile, sign-up reward, and penny of cash back from our cards, are we missing the advantages of simplicity? Can one card be enough?

Side One: One Credit Card

Name: Malcolm Bohm

Age: 49

Locale: San Diego, CA

Alma Mater: The University of London, with bachelor’s in Physiology and a Master of Medical Sciences degree

By Day: President and CEO of Liquid Grids

SoFi Member Since: January 2016

SoFi Loan: $35,000 personal loan

SoFi savings: 12% reduction in interest rate

Once bitten, twice shy

I’m a firm believer that multiple cards spell trouble. I got myself into financial difficulty by using a bunch of different credit cards. All those cards made it harder to track my purchases. I was faced with a number of statements for purchases I had forgotten about. I never missed a payment, but sometimes I was forced to just make minimum payments.

That’s why I became a SoFi member.

By consolidating my credit card debt into a personal loan from SoFi, I now make one, predictable payment each month—and save a lot in interest payments, too. Overall, choosing a personal loan has helped me plan my finances much more efficiently.

Related: 3 People From Different Backgrounds Who Took Control of a Combine $120K in Credit Card Debt With Personal Loans

Today, my wife and I use debit cards for pretty much all of our everyday household purchases. I do use one rewards card that’s tied to my favorite airline for larger purchases, such as my son’s private school tuition. But I stay away from electronic payment systems like Apple Pay, PayPal, and Samsung Pay. They’re useful and convenient, but they still make it too easy to purchase something that I might forget about at the end of the month.

Background matters

I was born in New York City, but for 33 years lived in Europe, where credit card usage isn’t as popular. In the United Kingdom, where I attended university and lived for 15 years before returning to the U.S., it’s much more typical to have overdraft protection on your checking account. We used to laugh at Americans who showed up in London with a Rolodex full of different cards.

Related:Find out how much interest you are paying on your debt with our Credit Card Interest Calculator.

When I moved back to the U.S. in 2001, I was overwhelmed by the credit card applications I saw in my mailbox every week. I also worry greatly that youngsters are bombarded with multiple credit card offers in media because they don’t understand yet how easy it can be to get into financial difficulties.

Side Two: Multiple Credit Cards

Name: Brett Holzhauer, SoFi Community and Member Success Associate

Age: 23

Locale: Salt Lake City, UT

Alma Mater: Walter Cronkite School of Journalism and Mass Communication at Arizona State University

By Day: Member of SoFi’s community and member success team

SoFi Member Since: 2016

SoFi Loan: $78,000 student loan refinance

SoFi savings: $5,000+

Growing up with plastic

I’ve always been a big fan of credit cards, even before I turned 18. My parents instilled in me that establishing a good credit score is important. I also see the other advantages to using credit cards, like free extended warranties on purchases, the ability to dispute charges, and the grace periods.

I got my very first card a couple of weeks after my 18th birthday when I bought a watch at Macy’s. On the spot, I was approved for a store card with a $500 credit line. Right now, I have 27 open credit card accounts with a total limit of $153,924, and 16 closed accounts. I don’t have the Macy’s credit card anymore, but I do still have the watch!

Throughout college, I flew for free with the rewards I earned on cards. Traveling back and forth between Phoenix and my hometown of Los Angeles didn’t add up to a ton of miles, but I was still able to eliminate the airfare costs with mileage cards.

Related: Ready For a Vacation? How To Use Credit Card Rewards To Travel For Less

From many, a few

I focus on using just two or three cards at a time. If I used all 27, my finances would be a mess—I wouldn’t be able to keep track of my spending. But having all those cards helps me pick from the best promotions. Every quarter, I evaluate the different cash back, rewards, and miles deals, and I track all my cards and statements on one spreadsheet.

Right now, I mainly use a Costco Anywhere Visa and a Chase Freedom card. The Chase card gives me 5% back on Uber this quarter. I actually prefer Lyft, but with 5% cash back I can’t say no. The Costco card gives me 3% cash back on travel and restaurant spending, which adds up really quickly. Whenever I go out to dinner with friends, I pay the check and they each Venmo me their share. Over a year, that strategy is worth hundreds of dollars.

The way I see it, I’m going to spend money every day for the rest of my life, whether it’s a pack of gum or a mortgage payment. Why not get rewarded for it?

If you’re looking to take charge of your credit card debt and optimize your finances, let us help. SoFi offers personal loans to consolidate high-interest credit card debt.

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2 thoughts on “SoFi Two Sides: Using Multiple Credit Cards, or Just One?

  1. Lee @ BaldThoughts says:

    I understand the strategy of using only one card after being burned by debt in the past. That makes sense for some people.

    However, if you’re diligent about paying off your cards in full each month, using a multiple card strategy offers many benefits.
    – First, it increases your float. If today’s the 10th and my statement on one card closes on the 15th, while another card closes on the 2nd, I would use the card that closes on the 2nd because I’ll get an extra 20 days of float on my money.
    – Second, many cards have specific bonus categories (ie: gas, groceries, dining, travel) that provide 2-3x as many points as a generic card. These extra points add up to get free hotel stays or flights so much quicker.
    – Third, having the right card comes with money savings perks. These include access to airport lounges, free checked bags, primary rental car insurance, and automatic upgrades at hotels.
    – And the fourth (and most important) reason is that a bank’s appetites for risk will change with the economy. So many good people saw their credit lines slashed or cards closed for no good reason during the last recession. If you only have one card from one bank, and they decide they no longer want you as a card customer, you’re in a tough situation.

    Diversification is key to a happy (financial) life. The multi-card strategy may not work for you in your current situation, but once you’re ready for it mentally and fiscally, I’d recommend having at least couple of cards in your wallet.

  2. The Chase Freedom promo also applies to Lyft this quarter. Just saying…

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