Have you ever wondered, how many credit cards should I have? Well, depending on who you ask, an exact number can be hard to pin down.
Go to a conservative financial planner, and they’ll advise you to have just one. Ask another– more liberal money expert– and they’ll say go for 10 credit cards or more.
Although these numbers vary greatly (1 is a whole lot different than 10), the warning remains the same: if you’re poor at managing your money and tend to over spend, stick to one credit card. But if you’re a pro at money management and live within your means, go for more.
Overall, most financial experts agree that more credit cards are better. But there’s a catch. More credit means more responsibility. So go for more if you know how to properly manage your money, use less credit than you have, and never carry a balance.
Here’s what the credit experts have to say:
How many credit cards should I have?
Crediful CEO Chane Steiner says you should have at least 1 credit card. Here’s why:
“Nearly one-third of American adults don’t have a credit card but everybody should have at least one. Responsible use of a credit card helps build your credit score and credit history. They’re also helpful in case of emergencies when you don’t have cash on hand to cover the expense.”
Former Financial Advisor and author Krista Goodrich says you should have 2-3 credit cards. Here’s why:
“On the one hand, the credit rating agencies use the number of lines of credit you have in determining your credit score and 21 or more accounts give you an “Excellent” rating in this category. This includes credit cards, mortgages, car notes, and things along those lines.
To have this many lines of credit open, you would likely have over ten cards. Great if you are financially responsible, but if you are not or if you are rebuilding your credit, then having too many cards can get you in hot water.
Start with 1 to 3 cards and build up your habit of paying them on-time and paying them off. And then build to more cards.”
Adam Marlowe of Georgia’s Own Credit Union says 2-3 credit cards. Here’s why:
“A good rule of thumb is to open up to 3, even if you don’t plan on using them,” says Marlowe. “Having open lines for long periods of time looks good for potential lenders. Just make certain to conduct one transaction annually on each card to avoid them being automatically closed for inactivity.
When getting new cards, do we need a credit card strategy?
“Yes,” says Goodrich. “First, use the card that has the lowest interest rate if you are building or rebuilding your credit or if you have a tendency to overspend.
If you are great at paying off your cards on time and managing your credit, use a cash rewards card or card that has perks like travel rewards. Another strategy is to use the reward cards for bigger purchases (to get the points) so long as you have a “pay-off-the-debt” strategy and your lower interest card for more regular purchases.”
What’s Your Number?
Now that the reviews are in, what’s your number? No matter how many credit cards you have , it’s clear from the experts that each card should have a purpose. From dining out, everyday expenses, travel, gas, and everything in between, give each card a job to do so your accounts remain active.
Finally, you’ll want to keep your available credit high and your balance low.
Start Building Real Wealth
Now that you’re building your credit, you’re probably ready to start building real wealth too. The first step is to create what I like to call a freedom fund.
To create this freedom fund, you’ll want to open a high-interest savings account. A few great ones include CIT Bank and BBVA. Both often have interest rates above and beyond regular banks. Open an account now before rates go down.
Next, you’ll want to grow your income. Maybe you want to create a passive income stream, start a business, land a new job, or take an online class that will help you command more money. Whether you choose one or all of these things, you’re already on your way to a life filled with more freedom and more success.