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A price protection credit card benefit offers a limited lowest price guarantee on your purchases. If an item you purchased is advertised at a lower price than you paid, then you might be eligible for a refund of the difference if you paid using a credit card with price protection.

Although the idea seems straightforward, price protection credit card clauses aren’t as simple due to differences between card programs. Here’s a closer look at what price protection is and how it works.

What Is Credit Card Price Protection?

Credit card price protection is a card benefit that some programs offer their cardholders. It guarantees that if an eligible item you purchased using your credit card is advertised at a lower price, the card issuer will refund you the price difference.

To receive the funds, you’ll have to file a claim asking to be refunded — it won’t automatically get deducted from your credit card balance. It’s also up to the cardholder to be on the lookout for price fluctuations.

Recommended: When Are Credit Card Payments Due

How to Use Price Protection

Credit cards with price protection are most advantageous when used toward a good that commonly changes in price. For example, this could include electronics, clothing, and other items that often go on sale.

There are also a few things to keep in mind when it comes to how credit cards work with price protection. For starters, to use price protection, the lower-priced item must be the exact specifications of your original purchase. This includes the product manufacturer, model number, and year it was released.

You’ll also need to ensure that the reduced price was advertised within the program’s specified timeframe, which is usually anywhere from 70 to 120 days. Plus, you’ll need to file a refund request within the allotted claim window.

Questions to Ask Issuers That Offer Credit Card Price Protection

If you’re specifically looking for a credit card with price protection, make sure you know all of the terms associated with this benefit. Contact the card issuer upfront to get clarity about the eligibility requirements for filing a price protection claim.

What Items Are Eligible for Price Protection?

The range of items that are eligible for price protection under your card’s benefit program can be quite broad. For example, home goods, furniture, clothing, footwear, kitchenware, bedroom linen sets, pet accessories, and more might qualify under your price protection credit card.

What Items Are Not Eligible for Price Protection?

Below are some examples of goods that might be excluded from price protection, depending on your benefits program:

•   Animals

•   Antiques

•   Bespoke or one-of-a-kind items

•   Cash-only purchases

•   Collector items

•   Food and beverages

•   Discontinued items

•   Jewelry

•   Limited edition items

•   Live plants

•   Original artwork

•   Perishable goods

•   Tickets

•   Services and related costs

•   Vehicles

•   Watches

Further, items purchased at liquidation sales, storewide sales, or online might not be eligible for price protection. Also note that price protection isn’t the route you take if you’re simply unsatisfied with the service or product you received. In that scenario, you’d request a credit card chargeback.

Recommended: What is a Charge Card

Guide to Filing for a Credit Card Refund

If the advertisement you’ve found shows a lower price than what you paid for your original purchase, and your situation fits your credit card price protection requirements, you can submit a claim for reimbursement. To do so, you’ll generally need to go through the following steps:

1.    Save the lower-priced advertisement. Retain the original physical ad that shows the product’s name, merchant or retailer, price, and date, if applicable.

2.    Find your original receipt. The purchase receipt for the item you bought should include the merchant’s name, date of purchase, item, and price. It should also show that you used the credit card with price protection. You might also be asked to supply a copy of your statement that has the original purchase on it.

3.    Submit a claim. Contact your card’s Benefits Administrator, or call the number at the back of your card, to file a claim for a price protection refund. Make sure that your claim is submitted within the eligible claim period.

4.    Review your balance. Check your credit card balance or statement to confirm that the refunded amount is correctly reflected on your account.

How long a credit card refund takes depends on your card issuer and its processing timeline. Generally, it can take three to seven business days to see a refund posted to your account’s balance.

How Long Do You Have to File for a Credit Card Refund?

The timeline you have to claim a credit card refund under price protection varies between credit card programs. Some cards allow you to file claims up to 70 days after your purchase date, while others give you up to 120 days from your purchase date.

Additionally, some benefits programs require that the advertisement date is within a certain number of days of your original date of purchase. Make sure to confirm the ad date requirement under the credit card price protection benefit, as well as the deadline to file a formal claim.

Is There a Limit to Reimbursement Through Price Protection?

Another restriction you might encounter for cards with price protection is the minimum and maximum refund limit per item. For example, your card might impose a minimum refund threshold of $10 up to a maximum refund of $250 per item. It also might have an annual reimbursement limit, which caps the total refund amount you can receive in a year.

If you want to file a refund claim under your price protection benefits, check your credit card’s benefits guide to learn about its specific requirements.

Recommended: What is the Average Credit Card Limit

Tips for Saving Money Without Credit Card Price Protection

Using a credit card with price protection isn’t the only way to save money when prices are reduced. Here are some other possibilities for saving:

•   Look for same-retailer price adjustments: Some retailers offer a price adjustment if you recently purchased an item in their store, and the same item is marked down at the same store not too long afterward.

•   Find price matches. To outprice their competitors, a retailer might offer a price match or lowest price guarantee. If you find the exact item elsewhere at a lower price, it will offer to match the price or offer a credit card refund for the difference if you’ve already purchased the item at their store.

•   Catch items on sale. Track upcoming sales, like a retailer’s annual sale or holiday sale, that offers a large discount off of the retail price. If shopping online, using an online price-tracking tool can help you find the lowest price.

•   Keep an eye on your credit card statements. While not necessarily a guaranteed path to savings, regularly reviewing your credit card statement can help you catch any charges that aren’t right, whether due to fraud or getting charged incorrectly. In those instances, you could dispute a credit card charge to attempt to get your money back.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Takeaway

A price protection credit card offers peace of mind when purchasing goods that might fluctuate in price. Aside from applying to tangible goods, you can take advantage of price guarantees for travel-related purchases like hotel rates, which can change daily.

When you use the SoFi Credit Card to book your hotel accommodations through Mastercard Travel & Lifestyle Service, you’re covered by its Lowest Hotel Rate Guarantee. It refunds you the difference if you find the same stay for less. Plus, you’ll earn cash-back rewards on all eligible purchases. Learn more and apply for a credit card with SoFi today.

Apply for a SoFi Credit Card now.

FAQ

What is price protection on a credit card?

Price protection allows cardholders to claim a credit card refund on a price difference if a lower published price becomes available. Typically, price protection is available for a limited period after the original purchase was made.

Do all credit cards offer price protection?

No, not all credit cards offer price protection. Card benefits, like price protection, vary across card issuers and credit card programs. See your card agreement to learn more about your card’s benefits and terms.

How can I use price protection?

In order to take advantage of price protection, you’ll first have to make a purchase using a credit card with price protection. Then, within the permitted time period, find the same product marked at a lower price. From there, you’d contact your card issuer to submit a claim for a refund in the amount of the difference between the two prices.

What is a price protection clause?

A price protection clause is the written parameters of your card’s price protection benefit. It states the issuer’s criteria for claiming the benefit, including the allowable time frame for a price protection request, eligible purchase categories, and more.

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Photo credit: iStock/jroballo

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.





Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Credit cards are a convenient method of payment that let you make cashless purchases in-person or online. However, millions of Americans fall victim to credit card fraud, according to the Consumer Financial Protection Bureau.

Identifying fraudulent activity and knowing how to report credit card fraud can help protect identity and your finances. Here’s a closer look at the process of reporting credit card fraud.

What Is Credit Card Fraud?

Credit card fraud is a type of identity theft. When a perpetrator commits credit card fraud, they’re making unauthorized purchases or cash advances using a credit card account that isn’t theirs.

Types of Credit Card Fraud

Fraudsters have developed many types of credit card scams to infiltrate unsuspecting consumers’ credit card accounts.

Account Takeover

An account takeover involves the perpetrator contacting the credit card issuer to make fraudulent changes or requests to gain access to your account. For example, they might claim to be you and request a new credit card issued to their address.

Card-Not-Present (CNP)

Card-not-present, or CNP, credit card fraud occurs when an unauthorized charge is put onto a card account without the physical card being present during the transaction. This might occur during online purchases or other instances when a transaction is performed without the physical card in hand.

Credit Card Skimming

Credit card skimming occurs when a skimmer device is placed onto a legitimate credit card sales terminal. It’s designed to look seamless and authentic. Upon swiping your credit card through the skimmer, the device captures your account data, including your credit card number, PIN, CVV number on a credit card, and more. Perpetrators can then create a copy-cat credit card with your account information encoded into it.

Fraudulent Card Applications

This type of credit card fraud occurs when someone opens a new card account under your name without your consent and/or knowledge. Fraudulent applications might lead to newly opened credit card accounts through pre-approval mailers that are intercepted by fraudsters.

Lost or Stolen Cards

A lost or stolen credit card is another common method of credit card fraud. Unlike CNP, the perpetrator obtains possession of your physical credit card and makes unauthorized charges. If your card is lost or stolen and then used before you realize it’s missing, an unauthorized user can make fraudulent changes in person or online.

Recommended: What is a Charge Card

How to Detect Credit Card Fraud

A key way to uproot credit card fraud is by staying keenly aware of the activity on your existing credit card accounts. For example, with the convenience of automatic payments, it might be easy to ignore reviewing your monthly statement since autopay lets you pay your bills without much effort.

However, if you didn’t notice an unauthorized charge come through because you aren’t keeping track of your transaction activity, it can become that much harder to thwart further fraud. Additionally, routinely reviewing your credit reports can help you flag any new credit card accounts that you didn’t activate.

You might also consider setting up credit card alerts, which can notify you when purchases or cash advances are made using your card. You can set these up through your card issuer’s mobile app and opt to receive a text message, email, or push notification. These frequent updates can help you respond quickly if anything goes awry.

Recommended: Tips for Using a Credit Card Responsibly

How to Report Credit Card Fraud

If you’ve found fraudulent activity on your card account, there are steps you can take to minimize your liability for the unauthorized charges.

Contacting Your Credit Card Issuer

As soon as you notice a fraudulent charge, contact your card issuer’s fraud department immediately. Report the unauthorized charge and explain that it was made without your knowledge or consent.

Typically, the issuer will immediately deactivate the old credit card and reissue you a new card to avoid further unauthorized transactions. If you haven’t done so already, change your online password for the compromised credit card account. Also, change the PIN for your card.

Reaching Out to the Credit Bureaus

Contact one of the three credit bureaus to submit a fraud alert. Doing so requires businesses to verify your identity before opening a new credit account under your name. This fraud alert is free to request and remains active for one year.

The credit bureau you contacted is required to inform the other two bureaus of the fraud alert on your credit. Request a copy of your credit report from each bureau and review them for any other suspicious activity.

Notifying the Authorities

Report credit card fraud to the Federal Trade Commission through its website, IdentityTheft.gov , or by calling 1 (877) 438-4338. By reporting the fraud to FTC authorities, your rights in relation to the fraud are reserved. The FTC will file the report and come up with a recovery plan.

You can also choose to file a fraud report with your local police department. Request a copy of the police report for your records.

How to Protect Yourself From Credit Card Fraud

Following a few practical credit card rules can help you reduce your exposure to potential credit card fraud:

•   Review your credit card statements regularly.

•   Observe your credit card and bank transactions for anything that’s incorrect or potentially fraudulent.

•   Track changes on your credit report.

•   Keep your credit card information private.

•   Set up mobile alerts on transactions through your card issuer.

How Credit Card Fraud Can Impact Your Credit

Credit card fraud can do incredible harm to your creditworthiness if it goes undetected. It can result in a sudden uptick in outstanding balances, which impacts your credit utilization ratio and can adversely affect your score.

It can also be problematic to your credit if new credit card accounts were activated under your name without your knowledge. In this scenario, the unauthorized account and charges incurred go unpaid, which can negatively affect your payment history.

Recommended: When Are Credit Card Payments Due

The Takeaway

Reporting credit card fraud is essential to avoid being liable for unauthorized charges or changes to your account. Stay apprised of your credit card activity by reviewing your credit card transactions at regular intervals and routinely checking your credit report for suspicious issues.

If you’re looking for a fuss-free credit card, SoFi has a solution.

FAQ

What happens when you report credit card fraud?

Upon reporting credit card fraud on your account, the card issuer initiates an investigation into the unauthorized charge or fraudulent claim. It might reissue you a new card to use while it conducts its investigation. It if confirms that fraud occurred, your maximum liability for an unauthorized charge is $50, depending on when you reported the fraud and/or lost or stolen card.

What do I do if I suspect a fraud card?

If you suspect that you were a victim of credit card fraud, immediately contact your card issuer to notify them of the unauthorized activity. Request a copy of your credit report to confirm that no other suspicious activity is associated with your credit. Finally, file an identity theft report through IdentityTheft.gov or with local authorities.

Can the bank find out who used my credit card?

The bank can trace the details of the unauthorized activity. These details include the merchant where the card was fraudulently used as payment; the transaction date, time, and amount; and the buyer’s IP address.

How do I claim credit fraud?

To claim credit card fraud, contact your credit card issuer. You can call the phone number listed on the back of your card or call the issuer’s fraud department directly to report the unauthorized activity and request an investigation.

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Photo credit: iStock/Moon Safari

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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With average credit card annual percentage rates (APR) topping 15% as of the second quarter of 2022, according to the Federal Reserve, savvy cardholders are looking for ways to reduce the cost of using a card. Some ways consumers achieve this is through a cash-back rewards credit card or a low-interest credit card.

The distinction between a cash-back vs. low interest credit card is that cash-back cards help you earn a small percentage of your spending back. Conversely, a low-interest credit card tends to charge less interest each month than a high-interest card, which is helpful for cardholders who roll a balance into the next month.

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What Are Cash-Back Credit Cards?

Credit cards that offer cash-back rewards are designed as an incentive to encourage spending on the card. For every eligible purchase you charge to your card, you’ll receive a small percentage of cash back. Some cards offer 1% cash back, while others offer as much as 8% or more, depending on the program’s rules. You might earn a flat rate across all purchases, or you might earn more in certain spending categories, such as groceries or gas.

You then can redeem your earned cash-back rewards. Redemption options may include a cash payment or a statement credit toward your next bill, or you may be able to redeem the rewards for travel, merchandise, gift cards, and more.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

What Are Low-Interest Credit Cards?

Low-interest credit cards incur a lower borrowing cost compared to a high-interest credit card. A credit card that charges low interest allows you to pay less for using the card if you carry a balance. This card feature is beneficial for cardholders who repay their monthly balance in increments over time, instead of in full.

The interest rate you qualify for highly depends on your creditworthiness, including your past borrowing habits and credit score. Consumers with strong credit might qualify for promotional no-interest credit cards that charge 0% APR for a limited period. After this period is over, the card’s interest rate increases, based on the cardholder’s credit and qualifications. As such, there are both advantages and disadvantages of no-interest credit cards.

Recommended: How to Avoid Interest On a Credit Card

Differences Between Cash-Back and Low-Interest Credit Cards

Below are the key differences between low-interest vs. cash-back credit cards to keep in mind when choosing a card:

Cash-Back Credit Cards	Low-Interest Credit Cards
You’ll generally need good credit to qualify.	Cash-back rewards offer an incentive for spending.
Cash-back rates vary by issuer.	Advantageous for those who don’t carry a balance.
Savings may be negated when a balance carries over.	Lowest APR offers are reserved for those with strong credit.
Advantageous for those who carry a balance.	Some cards offer a promotional 0% APR for a limited period.
Lowers the borrowing cost for carried-over balances.	Perks may be inconsequential when monthly balances are paid in full.

Factors to Consider When Choosing Between Rates and Rewards

Your unique financial situation, borrowing habits, and the features and benefits of a particular card are what you should consider when comparing your options.

Average Balance You’ll Be Carrying Monthly

How credit cards work is that they give you purchasing power up to a limited amount, even when you don’t have the cash upfront. You can choose to repay the debt in one lump payment by your statement due date, which allows you to avoid paying interest charges. Alternatively, you can make installment payments over multiple months, in which case you’ll accrue interest charges.

Not carrying a monthly balance is one of the common credit card rules to try to stick to, but it’s not always possible. For example, you might have had an unexpected injury that resulted in a medical bill that exceeded your cash savings. In this scenario, putting some of that cost on your credit card and making small, monthly payments to repay it might be necessary.

If you don’t have sufficient cash savings or income to confidently repay your monthly balance in full each month, a low-interest card might offer an advantage over a cash-back card.

Recommended: When Are Credit Card Payments Due

Your Average Monthly Spending

Look back at your monthly expenses and think about the total amount you’ll likely put on your credit card each month. For example, you might choose use a credit card to cover everyday expenses, like dining, groceries, and gas. Cardholders who rack up high monthly balances can benefit from a cash-back credit card that offers money back from purchases you’re already making.

The caveat, however, is if you charge more expenses to your card than you can realistically pay back in full by the statement due date. If you roll over any portion of your outstanding balance into the next month, you’ll get charged interest on that amount, which cancels out any cash-back rewards you may have earned.

Recommended: Tips for Using a Credit Card Responsibly

Annual Fees

Some cards — particularly rewards cards that extend high-value benefits and incentives — might charge an annual fee. For example, a cash-back card might offer an annual $300 travel credit and 5% cash back on flight purchases, but charge an annual fee of $550.

If you don’t travel enough to use up the credits and earn more cash back than the annual fee costs, that card might not be the best fit for your lifestyle. You’ll need to assess the total potential dollar value that a card’s benefits, credits, and other incentives offer in comparison to the upfront cost of the card’s annual fee.

Recommended: What is a Charge Card

Interest Rate Difference Between Cards

Although all credit card issuers check your credit to determine your interest rate, each card company has its own underwriting criteria. You might receive an interest rate offer for 13.99% APR for one card, and an offer from another card issuer at 11.99% APR, for example. To gauge interest rates, it can be helpful to look at the current average credit card interest rates for a point of comparison.

Regardless of whether you end up with a cash-back credit card vs. low interest credit card, it’s always a good idea to shop around for the lowest interest rate you can get. That way, if you ever need to carry a balance, you can minimize the amount of interest you end up paying.

Guide to Lowering Your Credit Card Interest Rate

Whether you’re shopping around for a new credit card or have an existing card with a high APR, here are some ways to lower your interest rate:

•   Contact your card issuer. If you’ve been a loyal customer and have kept your account in good standing, or if your credit score has improved since you opened the account, your credit card issuer may be willing to reduce your rate.

•   Raise your credit score. Even if you already have good credit, strengthening your credit score can help you secure the most competitive interest rate in the future. Good borrowing habits — like making on-time payments and keeping your credit utilization low — are just some ways that may help your score.

•   Consider a low-interest balance transfer card. If you have a high-interest card with a balance on it, and you have strong credit, a balance transfer card can allow you to move your original balance onto a low-interest card. Before proceeding, always compare the balance transfer fee against your potential savings to confirm that it’s worth it.

Remember, what’s considered a good APR for a credit card is subjective, based on your creditworthiness and other factors. Securing the lowest APR that you qualify for can help you avoid heavy interest charges if you roll over a monthly balance.

Explore SoFi’s Credit Card With Rewards

Ultimately, whether you opt for a cash-back credit card or a low-interest card depends on how you plan to use the card and whether you practice responsible credit card habits. But why choose one or the other when you can explore credit cards with low interest rates and cash-back rewards?

A SoFi Credit Card offers the advantages of a cash-back rewards credit card with the opportunity to lower your APR through responsible credit usage.

FAQ

When is a lower annual interest rate better than a low annual fee?

A lower APR is better if you typically carry a balance from one billing cycle to the next. When you roll over a balance, old and new balances accrue daily interest charges that can cost you more money out of pocket. A low annual fee is something to look for when you’re using a card to earn incentives, like credit card rewards.

Are there credit cards with low interest and cash back?

Yes, there are credit card options that offer a low interest rate to qualified applicants, as well as cash-back rewards. However, you’ll generally need to have good credit in order to qualify for the most competitive rates offered by low-interest rewards credit cards.

How can I choose between low APR and rewards?

Consider your credit history and score to determine whether you meet the minimum qualifications for a credit card’s lowest APR. Also, examine your general credit card habits, like whether you often roll over a balance and what your monthly spending habits are like. Compare those details against the costs of carrying a card, like annual fees and the APR you’re offered.

Is it better to find a credit card with low or high interest?

Finding a credit card that offers a low interest rate is always the better move. The lower your APR, the less you’ll pay for borrowing on credit if you decide to carry a balance month to month.

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Photo credit: iStock/AsiaVision

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


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There’s also a lot of important information in a credit card statement. Specifically, you’ll find details about rates, fees, transactions, payments, and any changes to your card’s rules and regulations. All of the fine print might look overwhelming, but if you spend some time learning how to read your credit card statement, it will become easier to navigate. In fact, you may even find it helpful in understanding how to manage your credit.

Keep in mind that every credit card provider’s statement looks a bit different, though they’ll share some similarities. In other words, your statement might look a bit different from our high-level overview of a credit card statement’s components. Still, this guide can serve as a jumping-off point to better understanding a credit card statement.

How to Read a Credit Card Statement

Below you’ll find an overview of each of the major sections of a credit card statement, as well as what important information you can find there.

Account Summary

This section is an overview of all of the transactions that have taken place on your credit card account during a billing period. Here are some key pieces of information you’ll find in the Account Summary section of your credit card statement:

•   Your name and mailing address: While this is information you already know, it’s important to make sure it appears accurately on your statement.

•   Your account number: The entire account number may appear, or the statement may only list the last four digits.

•   The billing cycle’s dates: You’ll see your credit card statement closing date and the length of your billing cycle, which impact how interest is calculated. The statement will only reflect activity from the current billing cycle. This means your statement may show different numbers than what you see when you look at your account online, which may include transactions that occurred after the credit card statement cycle closed (this is the difference between a credit card statement vs. current balance).

•   The previous balance: This is the previous month’s remaining account balance.

•   The new balance: This figure takes into account all of the activity for that billing cycle. Additional purchases, interest charges, fees, balance transfers, credits, or payments are either added or subtracted to the previous balance to determine this balance. If, for whatever reason, you were credited more than you owe, that would result in a negative balance on a credit card.

•   Your credit limit and available credit: This is where you’ll find your overall credit limit, as well as how much of that remaining limit is available for your use.

Recommended: What is the Average Credit Card Limit

Payment Information

In this section, you’ll find information on what is owed for the billing cycle. If you look at no other section on your credit card statement, you’ll probably want it to be this one. Here’s what you’ll find there:

•   Your new balance: This is how much you’ll owe on this particular statement. If you pay this amount in full, you can typically avoid accumulating interest charges.

•   Minimum payment: This section will include information on your minimum payment for the month. You must pay this amount to avoid late fees and negative reporting to the credit agencies.

•   Payment due date: If you fail to make the minimum monthly payment by your payment due date, you may be charged a late fee. Missing a payment might also trigger a higher penalty annual percentage rate (APR) and potentially negatively impact your credit score.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Late Payment Warnings

Credit card statements typically have sections that state what happens in the event that a minimum monthly payment is not received by the due date listed. The late payment warning generally includes information on the penalty APR (if applicable) and the late payment fee.

Minimum Payment Warning

The minimum payment warning section explains how long it will take to pay off a credit card balance and how much interest you’ll owe if you make only the minimum payment. While it’s possible to pay off a credit card balance by only making minimum payments, the process can be slower and more costly in the long run when you factor in compound interest.

The minimum payment warning section may include details for an expedited payment schedule, such as three years, or 36 monthly payments. This can serve as a useful comparison if you’re unsure of just how much you’ll save in interest charges by making more than the minimum monthly payment.

Another way to explore interest costs over different repayment periods is by using a credit card interest calculator.

Recommended: What is a Charge Card

Rewards Summary

If you carry a rewards credit card, arguably the most fun section to review on a credit card statement can be the rewards summary. Here’s what you can find detailed in this section:

•   Prior rewards balance: This shows your rewards accrual from spending in prior billing cycles.

•   Rewards earned this period: This shows how many points or miles were accumulated over the most recent billing period through using a credit card.

•   Rewards redeemed: This will show the amount of rewards you’ve redeemed that statement period, if any.

•   Rewards available for redemption: This portion details how many points or miles you’re currently able to redeem, whether for cash or travel.

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Credit Counseling Notice

Your credit card statement may include information for nonprofit credit counseling. If you’re having a difficult time managing your credit, you might consider using this resource. These programs are typically long-term solutions, however, and may not be able to help if you’re in immediate risk of missing a payment.

If you are unable to make a payment, call your credit card company and ask about your options. Credit card companies may have ways to help.

Recommended: When Are Credit Card Payments Due

Notice of Changes to Interest Rates and Other Changes

If an action on your account triggers some sort of change to the account, there is usually a section dedicated to explaining this change (or potential change). For example, if a missed payment triggers the penalty APR rate, you must be notified of the change.

Similarly, if there are any other major changes to your account, rates, or fees, you may find more details in this section.

Recommended: How to Avoid Interest On a Credit Card

Transaction Charges

This section is a list of all of the transactions that occurred during a billing cycle, including:

•   Purchases

•   Returns

•   Any other activity that would affect the running balance on a credit card

Additionally, each transaction typically includes the following information:

•   The vendor

•   The date the transaction was made

•   The date the transaction was posted to the account

•   The dollar amount of the transaction

Note that this section will only include information from the transaction period. Transactions that happened after the billing cycle will be included in the next period’s statement.

You may want to consider making a regular habit of checking your transactions each month to look for any errors or potentially fraudulent activity. If something looks suspicious, report the activity to your credit card company.

Fees and Interest Charges

Credit card statements typically have a section dedicated to fees and interest charges. In this section, you may find the following:

•   Interest charges by type of transaction: You may be charged a different interest rate for purchases than for balance transfers or cash advances, for instance. This section will break down the APR for each transaction type.

•   Interest charge calculations: In this section, you’ll be provided with the calculation for how interest was charged on each type of transaction.

•   Year-to-date total of all fees and interest: Credit card statements may also include a total of all fees and interest charged for the current year.

The Takeaway

As you can see, your credit card statement contains a wealth of information. Learning how to read a credit card statement can ensure you have all of the details you need to be an informed cardholder. Plus, understanding a credit card statement can help you learn how to better manage your credit and take advantage of all that your card has to offer.

Perhaps one of the most exciting credit card statement sections to review is the rewards summary — but you need a rewards credit card for that to be included. If you’re looking to earn rewards through your everyday spending, consider a cash-back rewards card like the SoFi credit card.

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External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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In general, there’s no “right” number of credit cards to have. Some might suggest having at least two credit cards, preferably from different networks — say, a Visa and an American Express, or a Mastercard and a Discover card — and strategically choosing them for the best combination of rewards. Others will recommend making this determination based on how many credit cards you can effectively handle, or how many is optimal for your credit score.

At the end of the day, the ideal number of credit cards depends on your personal financial situation. We’ll help you figure out how many credit cards you should have, and whether it will be good for you to have multiple credit cards.

How Many Credit Cards Does the Average Person Have?

Cardholders in the U.S. have an average of 3.84 credit card accounts, according to a review of national credit card data by the credit bureau Experian.

The data also found that the number of credit cards someone has tends to increase the older they get. For instance, baby boomers (ages 56-74 as of 2020), held an average of 4.81 credit cards, whereas millennials (ages 24-39 as of 2020) had just 3.18 credit cards on average.

How Many Credit Cards Are Too Many?

There isn’t a set number of credit cards that tips you over into the territory of having “too many.” As long as you can stay on top of all of your accounts and manage them responsibly, having a number of credit cards won’t negatively affect your credit.

That being said, even just two credit cards could be too many if it becomes challenging for you to remember to make on-time payments on both accounts or you’re overspending. The more credit cards you have, the more credit card terms you’ll have to keep track of, which can get complicated. You may also run into paying multiple annual fees, and costs can add up quickly there — especially if you’re not using a credit card enough to justify the cost.

Even if you do think you can manage having multiple credit cards, you’ll want to watch out for applying for too many new cards within a short window of time. Doing so can lower your credit score temporarily, and it can also raise a red flag for lenders. Issuers have even begun to introduce rules to prevent cardholders from attempting credit card churning, which is when you repeatedly open and close credit cards to earn welcome bonuses.

Does Having Too Many Credit Cards Affect Your Credit Score?

Having multiple credit cards can either help or hurt your credit score, depending on how responsibly you use your cards and how well you understand how credit cards work. However, if you’re in a situation where you’re starting to feel like you have too many credit cards, this could lead to negative effects on your credit score.

Multiple credit cards mean multiple due dates to juggle, which can make it easier to miss payments or make them late. Because payment history accounts for 35% of your FICO score, this can have big implications for your credit.

Secondly, opening a number of new accounts can lower the average age of your credit, which matters since credit history length accounts for 15% of your score. Applying for a credit card also requires a hard inquiry, which can temporarily ding your score.

On the flipside, having multiple credit cards does offer you more access to credit. If you don’t increase your current outstanding balances, this could positively impact your credit utilization rate, which compares your outstanding balances to your total credit limit. Further, a new credit card means an addition to your credit mix, which comprises 10% of your FICO score.

Recommended: When Are Credit Card Payments Due

Potential Reasons to Apply for Another Credit Card

Trying to figure out what is a good amount of credit cards to have? Here are some potential reasons you might consider applying for an additional card.

Potentially Raise Your Credit Score

If you’re wondering, ‘is it good to have multiple credit cards?,’ know that sometimes getting an additional card can benefit your credit. This might be the case if your newly opened card increases your overall credit limit. If you keep your total credit card balances the same, your higher limit will lower your credit utilization rate, which is one of the factors that affect your credit score.

Other ways that getting another credit card can help your credit is if the new card adds to your existing credit mix and if you consistently make on-time payments. Both of these also contribute to your credit score, so improvements there could positively impact your score.

Maximize Rewards

Perhaps the top reason that people open multiple credit cards is to maximize the rewards they can earn. For instance, another card might be worth adding to your arsenal if it optimizes rewards in a category in which you don’t currently earn much. Or, for example, you might pair a basic cash-back rewards credit card for your everyday spending with a travel rewards card that can help you cover the cost of flights and enjoy perks while traveling.

Ensure You Can Pay If One Card Is Stolen

Having more than one credit card in your wallet can also act as an insurance policy of sorts. Say one of your cards gets stolen or is unexpectedly frozen due to fraudulent activity. That can leave you in a lurch at checkout if you don’t have any cash on you. By applying for an additional credit card, you’ll ensure that you always have a backup in case anything were to happen.

Pay Off a High-Interest Card with a Balance Transfer

You also might opt for an additional credit card if you have debt to pay off and qualify for a 0% APR introductory offer. These promotional offers allow you to move over a balance and pay it off interest-free within a certain period of time.

Just keep in mind that you’ll usually need solid credit to qualify for these offers, and a balance transfer fee will apply. Other pros and cons of no-interest credit cards include the fact that you’ll need to ensure you can pay off your debt before the promo offer ends — and a higher interest rate kicks in.

Secure a Higher Overall Credit Limit

Another possible benefit of opening an additional credit card account is that doing so can increase your available credit limit. Especially if your credit score has improved significantly since you last applied for a credit card, you could get approved for a higher limit.

Even if this card’s credit limit isn’t that different from those of your other cards, adding another card can help you keep your credit utilization rate from getting too high, as your overall credit limit will go up.

Recommended: What is the Average Credit Card Limit

Potential Drawbacks of Getting Another Credit Card

As mentioned, opening multiple credit cards within a short period of time can lower your credit score. But even if you don’t do that, there are possible issues that can arise when you have multiple cards — in other words, it isn’t always better to have more credit cards.

Potential to Lower Credit Score

Perhaps the biggest potential issue of having multiple credit cards is the possibility of harming your credit score. If you’re missing payments because you’re finding it hard to juggle multiple due dates, or are overspending and driving up your credit utilization ratio, your credit score will suffer.

Plus, even if you’ve paid off your accounts, having a large number of credit cards open can make you look risky to lenders, possibly lowering your score.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

Fees

Another possible downside to having a number of credit cards is the fees you could face. Depending on the credit cards you have, you could end up paying multiple annual fees. These could become harder to offset with your credit card usage if your spending is spread across multiple cards.

Further, you might have a harder time keeping track of which cards charge which fees. This can make it more challenging to dodge unnecessary fees.

Recommended: How to Avoid Interest On a Credit Card

Harder To Keep Track Of

It’s likely that all of your credit cards could start off with a different due date, which can make it that much easier for a payment to slip through the cracks. Plus, you’ll have multiple different websites or mobile apps to check in on and visit in order to make your payment.

To make it easier on yourself, consider automating your payments or changing your due dates so they all fall on the same day. This can make it easier to adhere to one of the cardinal credit card rules of always making on-time payments.

Could Get Into a Cycle of Debt

When you have an array of credit cards in your wallet to choose from, it can feel easy to keep swiping. Plus, by using a number of different cards, you’ll be spreading your charges out, which can make it more challenging to track how much you’re actually spending in total.

To keep your spending in check, don’t spend more on your credit cards than you can actually afford to pay off in cash. Ideally, you’ll be able to pay off all of your credit card balances in full each month. Otherwise, interest charges can add up quickly, which is one of the reasons why credit card debt is hard to pay off.

Recommended: What is a Charge Card

More Difficult to Spot Fraudulent Activity

When you have just one credit card, checking your credit card balance regularly is pretty easy to do. But once you start growing your number of cards, it will take more legwork and effort to stay on top of your statements and check for any suspicious charges. This can make it harder to spot any potentially fraudulent activity and report it in a timely manner.

Determining How Many Credit Cards to Have

Now that you know the potential upsides and drawbacks to having multiple credit cards, you’re left with the question: How many credit accounts should I have? As mentioned before, the ideal number of credit cards varies from person to person. Here’s what to consider as you make this determination for yourself:

•   Do you have a history of responsible spending? If you think that applying for another credit card will lead to spending beyond your means, you might be better off skipping an additional card.

•   What’s your reason for getting another card? As mentioned, opening up another card can help you maximize rewards, increase your purchasing power, or even assist in building credit. However, if you’re seeking another card because you’re low on funds and want to be able to fund more purchases, that could lead to a cycle of debt.

•   Are you confident you’ll be able to pay off your balances in full each month? Credit card interest can add up quickly if you’re not paying off your balances in full on a monthly basis (just check out our credit card interest calculator for proof). Before taking on an additional credit card, ensure you’re in a good financial position to pay off your balances regularly and in full.

•   Has your credit score improved since you last applied? A better credit score generally translates to better rates and rewards and higher credit limits. To make applying for a new card worth your while, it generally helps if you’ve done work to improve your credit since you last applied.

•   Do you have any other upcoming loan applications? If you know you’ll need to apply for a loan — whether that’s a car loan, a personal loan, or a mortgage — consider whether a credit card application is necessary right now. Applying results in a hard inquiry, which temporarily dings your score, making you a potentially less competitive applicant for the other loan you need.

Recommended: Tips for Using a Credit Card Responsibly

The Takeaway

The answer to the question, ‘How many credit cards should I have?,’ largely depends on your personal financial situation and how many credit cards you feel you can responsibly manage. In the big scheme of things, how you use your credit cards may be more important than how many you have. To determine the ideal number of credit cards for you, you’ll want to weigh the pros and cons of adding another card to your wallet.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOCC0922018

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