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Americans carry 4 credit cards on average. Here’s how many you should have, according the experts

Managing multiple cards isn’t for everyone.
Photo illustration by Fortune; Original photo by Getty Images

Credit cards often get a bad rap for having high interest rates and leading to unmanageable debt. But they’re also a necessary financial tool and can be a huge asset—if managed responsibly. 

Having a credit card can provide you with financial breathing room when facing emergency expenses or when a purchase doesn’t fit neatly into your monthly budget. It can also help you start building a positive credit history, and offer a safe and secure alternative to other payment methods. 

How many credit cards does the average person have?  

According to the latest figures from Experian, the average American has 3.84 credit cards with an average credit limit of $30,365. And their credit journey usually begins early, with the average Gen Z consumer having 2.1 credit cards

Your credit card habits account for a huge portion of your credit score’s makeup, from the number of cards you apply for to your balances, payment history, and more. Being selective about which cards you have and how many is key to maintaining a healthy score. 

How many credit cards is too many? 

So, how many credit cards should you have? And how many is too many? According to experts, the answer is: It depends. 

The number of credit cards you should have ultimately depends on your personal needs and spending habits. “Some consumers use only one card so they can build credit history, but other consumers may want many different cards for personal, business, travel, airline status, et cetera,” says John Cabell, managing director of Payments Intelligence at J.D. Power.

As far as how many is “too many,” you’ll want to limit the number of credit cards you have to how many you can feasibly keep track of and afford to pay off each month. Credit cards are only a valuable asset as long as you can make on-time payments and avoid carrying a balance from month to month. If you aren’t able to do that, you could find yourself crushed by unmanageable debt, interest, and fees. 

On the flip side, if you can manage to keep track of your payment due dates and keep your spending under control, you could see a boost in your credit score over time. 

How credit cards affect your credit scores 

Your credit cards directly impact your credit score in a few different ways. Here’s a look at the different factors that go into the overall makeup of your FICO score—the most widely used credit-scoring model. 

  1. Payment history: Issuers like to see that you have a record of making on-time payments on your debts. 
  2. Amounts owed: This is the sum of your overall balances. When it comes to credit cards, your credit utilization ratio tells issuers how much debt you have compared to credit available. Most experts suggest spending no more than 30% of your available credit. 
  3. Credit history length: Having a long track record of responsibly managing credit shows issuers that you can be trusted with new credit. 
  4. Credit mix: A good mix of different credit products tells issuers you can handle new credit responsibly. 
  5. New credit: The number of new credit accounts you’ve recently opened. 

Each time you apply for a new credit card, the financial institution will pull your credit report to determine whether to approve your application. This is known as a hard inquiry. “Too many cards can hurt your credit score since the ‘hard’ credit check for each card application can lower your score at least temporarily,” says Cabell. 

If you’re approved, a new credit card can positively impact your credit mix and credit utilization ratio by introducing a new kind of credit into your portfolio and increasing your available credit. However, it can also hurt your score if it’s one of a series of recent credit applications or if you fail to make any payments on time. 

When it makes sense to have more than one card

There are cases when having multiple credit cards can be beneficial. Rewards credit cards, for example, can help you cut costs if you’re using a card that rewards you for purchases you were already planning to make. 

“Using a card that offers cash back on dining and restaurant purchases, and a card affiliated with a service station retailer for purchasing fuel can be a smart way to maximize card value,” says Cabell. 

Some consumers might also prefer to have at least two credit cards so that they can use one for everyday expenses, and use the other to finance large purchases. Before you sign up for additional credit cards, you should first take a close look at your spending habits to see if you can pinpoint any patterns. 

If you’re making frequent trips to the grocery store, filling up your tank daily, or visiting a certain retail store often, you might consider a credit card that will reward that spending and help you save in the long run. 

Once you’ve decided which cards make the most sense for you to have, you’ll want to set yourself up to succeed by setting up automatic payments and regularly monitoring your spending and credit score. You can even choose your credit card payment date so that it aligns with the same day that your paycheck hits your bank account. 

“The most important thing is to make sure you are paying at least your minimum payment on time,” says Autumn Lax, CFP and Accredited Investment Fiduciary at Drucker Wealth. “From there be mindful of your interest rate, focusing on paying higher interest cards down or off completely.”

When to hold off on getting a new credit card  

Managing multiple cards isn’t for everyone. It can tempt you to spend more than you can afford to pay off and drag your credit score way down. Knowing what kind of spender you are and being realistic about your ability to manage multiple cards is key. 

You may want to hold off on applying for a new credit card if: 

  1. You struggle with debt management: Having access to even more credit could add to your growing debt balance. Know when to say when, and avoid applying for a new card if you’re already struggling to manage the ones you have. 
  2. You have too many recent hard inquiries: Each time you apply for a new credit card or other type of financing, a hard inquiry will be recorded on your credit report. Applying for too many lines of credit in a short time can do some serious damage to your credit score and scare lenders away from doing business with you. 
  3. You plan to apply for financing soon: A clean credit report and high credit score are key to scoring financing for a new home, car, or business. If you’re planning to apply for a loan soon, consider holding off on any new credit card applications until after you’ve secured the financing you need. 

Before you add a new card to your wallet, make sure it will work for and not against your financial goals and budget. “A credit card can allow you to extend your purchasing power by buying things and paying for them when you have the cash,” says Cabell. ”At least as long as you are working within your overall available income.”

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