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How Many Credit Cards Should I Have?

March 30, 2020 · 5 minute read

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How Many Credit Cards Should I Have?

In general, there is no “right” number of credit cards. Some people suggest having at least two credit cards is smart, preferably from different networks—say, a Visa and an American Express, or a Mastercard and a Discover card—strategically choosing them for the best combination of rewards, whether that’s cash back, travel miles, reward points, and so forth.

Here’s another way to look at it. It’s important to have the number you can effectively handle. Yet another way to look at the question is from a credit score perspective. How many credit cards should a person have to optimize his or her score?

Well, a principal scientist for FICO®, Ethan Dornhelm, has said that, “Generally speaking, there is no one perfect number.” FICO is the company providing data analytics for the credit score most commonly used by lenders.

Now that we’ve provided a high-level kind of answer to the question posed—how many credit cards should you have?—we’ll go into more detail about how many credit cards might be right for you, along with tips around credit card selection and their associated rewards.

Plus, we’ll take a look at some things to think about if credit card debt is weighing you down, including a debt consolidation strategy.

Credit Card Statistics

According to a report using November 2019 data from the American Banking Association:

•   374 million open credit card accounts existed in the United States in the middle of 2019, which was a 4.1% increase over the previous year; they include: 197 million accounts by superprime consumers, 103 million accounts by prime consumers, and 74 million accounts held by subprime consumers
•   More than 75.5% of Americans have one or more credit cards, approximately 191 million American adults
•   5% of people in the United States have a charge card, which is a credit card that must have its balance paid off in full each month

Meanwhile, credit card debt is at its highest ever , data as of Q3 2019 showed that credit card debt topped the $1 trillion mark, with an average household debt balance of $8,398.

So, this indicates that Americans have and use credit cards, and collectively carry a massive amount of credit card debt, but doesn’t yet answer the question of how many credit cards is too many or how to choose the best ones for your needs. That’s next.

Choosing the “Right” Credit Cards

What’s right for you isn’t necessarily right for someone else so, before you choose what credit cards to apply for, think about its main purpose. In general, it makes sense to select credit cards with comparatively lower interest rates and, ideally, no annual fees. But, what about beyond that?

Are you, for example, wanting to transfer balances to or make a large purchase on a zero interest credit card? In that case, you’d be wise to check to see what happens when the card reverts to its actual rate after the no interest introductory period ends.

Will you owe interest on just the remaining balance or the original balance if the debt isn’t paid off in full? What balance transfer fees are charged? Some can be as high as 5%, so compare options.

If you do plan to transfer balances, note that closing the credit card(s) you previously used may hurt your credit score. Here’s why. When you have a credit card for a period of time, this can signal to credit bureaus that you have financial stability, especially if you’ve at least made minimum payments on time. If, though, you close a card, this might signal something else entirely.

Or, if you plan to apply for a credit card to build or rebuild your credit, you may want to search for issuers that are open to that process. Because credit card companies typically factor in credit scores when reviewing applications, it can make sense to carefully target where you apply. If you apply for cards that you ultimately don’t qualify for, these hard inquiries could end up hurting your score, the opposite of your goal.

If your credit history is problematic, it may help to apply for a secured card, one where you’d put down a deposit with the credit card issuer.

When choosing a credit card, perks are often also important to many. Are you looking for cash back opportunities? Do you travel for work and/or for pleasure?

Some credit cards offer extended warranties on purchases, with Kiplinger.com sharing more about lesser-known credit card perks.

Some card issuers, for example, will repair, replace or reimburse you if you charge an item that is damaged or stolen within a certain coverage period. Some might refund the difference if you charge an item that goes on sale, while others offer special access to tickets and events, cell phone replacement and more.

Determining How Many Credit Cards to Have

You’ll likely want fewer than the world record number of 1,562.

And, how you use your credit cards, in the big picture, may be more important than the number. Your credit utilization rate, which is the percentage of the credit you have available that you actually use, can have a more significant impact on your credit scores than the number of cards. So, when you open a new credit card, you might improve your credit utilization rate.

What’s also important for your credit score: your ability to pay at least all of the minimum payments on time.

But, even if you meet payment criteria for a good credit score, if you can’t pay off your balances monthly, you’re likely paying plenty of money in interest.

The reality is that credit card debt can be challenging to pay off. Most credit card companies charge compounding interest, meaning that you also pay interest on any accrued interest.

The interest is continually calculated and added to your balance, which you then pay interest upon—and, to make matters worse, most credit card debt is compounded daily, even when you make your minimum payments. It only stops when the balance is paid in full.

Here’s an example. If you owe $5,700 in credit card debt, and your APR (annual percentage rate) is 16.96% with a payment of $100 per month, it would take you 117 months to pay off your debt. That’s nearly 10 years! And, you would have paid $5,995 in interest, more than doubling your original charges.

You can use our Credit Card Interest Calculator to get a rough idea of how much interest you’ll pay on your debt and how long it might take you to pay off.

Getting Out of Credit Card Debt

To make this happen, you have at least two options. You could determine how much you can afford to pay each month and then reverse engineer how long it could take to pay off the debt, using a tool like SoFi’s Credit Card Interest Calculator linked above.

Or you can pick a date by which you want to pay off your credit card debt and determine what the payment needs to be to make that happen. Both of these strategies go on the assumption that either no new charges would be made or that you’d recalculate what you’d need to pay monthly based on new purchases.

A third method is consolidating your credit card debt into a low interest loan, like an unsecured personal loan, which has the potential to reduce the cost of your debt. With this strategy, you apply for a personal loan and, if approved, use the funds to pay off your credit cards. Then, you pay the personal loan off in monthly installments.

Personal loans typically don’t accumulate compound interest in the way that credit cards do. So, as long as you meet your monthly payments, the balance of your debt doesn’t increase.

Plus, if you have a strong personal financial picture, the interest on your personal loan can be more reasonable than what you’re currently paying in credit card interest. You can use SoFi’s Personal Loan Calculator to estimate how much you might save.

Finally, having different types of credit has the potential to improve your credit score. So, it can help to have a mix of revolving debt (credit cards, for example) and installment loans (such as personal loans).

Personal Loans for Credit Card Debt Consolidation at SoFi

Benefits of choosing SoFi to consolidate your credit card debt include that our personal loans:

•   are unsecured, so you don’t need to put up any collateral
•   have a fixed payment schedule, making them easy to track, with a target payoff date
•   can allow borrowers to enjoy lower interest rates without compounding interest
•   have absolutely no fees and no surprises

Ready to check your rates for a personal loan? At SoFi, the process is fast, easy, and convenient. Let’s get started!


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