Credit cards have several benefits, like earning points and building credit. Your credit score and report can affect insurance premiums and loan approvals. But credit cards can also create debt and having multiple cards can increase your chances of missing a payment.
Some financial gurus like Dave Ramsey argue no one should own a credit card because debt is just too dangerous. But that’s not realistic for most people. The average American owns almost four credit cards, based on a survey by consumer credit bureau Experian. They also have an average credit card balance of $6,200.
So how many credit cards is too many? Depends who you ask. We polled 15 experts, and all of them said you should have at least one card, but were split over the ideal number to have.
Q: How many credit cards should you have?
Why some experts think you should have one or two cards
“I recommend one card as your primary and one as backup in case the primary card is lost, stolen or temporarily unavailable for any reason. Choose a primary card with a value proposition that is most appealing to you, like airline miles or cash back — try to channel all spending toward that card to maximize the rewards rather than allocating spend across multiple cards.”
— Ron Guay, certified financial planner at Rivermark Wealth Management
“If used correctly, credit cards can be a great financial tool. In addition to being among the safest ways to spend money, most offer some additional features such as cash back, travel miles or points that can be redeemed. It's important to pay the balance due each month to avoid paying any interest, so following a budget is important. Assuming you can do that, one or two cards that provide you with your preferred rewards are great.”
— Mark Halby, certified financial planner at DLK Investment Management
Why some experts think you should have two or three cards
“If you are paying your credit card balances off in full every month, then having multiple cards can have its advantages. In addition to taking advantage of various credit card reward categories, having multiple credit cards can also help you avoid exceeding 30% of your available credit per card each month by spreading your spending over multiple cards. A low credit utilization ratio can help your FICO credit score.”
— Ryan Callaghan, certified financial planner at The Harbor Group
“If you own a business, a credit card just for business use is needed, separate from personal credit cards. This enables tracking and monitoring of business expenses for income tax reporting purposes. I also recommend having at least two personal credit cards: One for daily or recurring costs such as groceries and household supplies and the other one (or two) for more costly, less regular purchases such as clothing, prescriptions, medical, entertainment and home furnishings.”
— Sallie Thompson, certified financial planner
“If you are young and trying to build credit, the more [cards] the better. If you are paying off the balance in full, you can ask for a credit line increase from the same company after some time of account opening and making regular payments.”
— Mohit Desai, certified financial planner at MD Wealth Advisors
How to responsibly have a credit card
No matter how many credit cards you own, here are some tips for responsible use:
- Track your spending. Use a spreadsheet or app to monitor your purchases, and set a maximum amount you’ll put on your card.
- Automate your payments. Pay your credit card bill in full each month with a recurring payment, so you’ll never forget.
- Set up roadblocks. Curb impulsive spending by creating some friction: For example, don’t save your credit card information online.
Applying for a card? Make sure you avoid this innocent mistake.