Credit Cards

How Many Credit Cards Can You Have

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 5 minute read

When it comes to the number of credit cards you should have, it all depends on your unique situation, and it’s crucial that you utilize them sensibly. When it comes to new credit card signup bonuses, you might be wondering what’s stopping you from taking advantage of them all. However, before adding another credit card to your wallet, you’ll want to think about the influence it will have on your credit score and your spending patterns.

How Many Credit Cards Can You Have? According to a 2017 poll by Experian, the typical American has 3.1 credit cards. You may, however, maintain a decent credit rating by having more than one credit card.

To what limit may I apply for several credit cards?

The number of credit cards you may own is technically unrestricted. It takes 1,498 legitimate cards to break the Guinness World Record for the largest collection of cards. How many credit cards you should carry is a matter of personal preference. A corporate credit card, premium travel rewards card, and cash-back credit card — or possibly several of each — can make sense for you.

It’s not the number of cards, it’s how you use them

The way you use your credit cards is more significant than how many you have. Always pay off the entire statement balance each month if you want to maintain good credit health by paying your bills on time. On the other hand, your credit score will drop if you’re late on payments, go over budget, or pay the bare minimum. Make sure you don’t open more accounts than you can keep track of properly.

A creditor’s credit card limit can be set independently by them.

Credit card companies may impose their own restrictions on the number of cards an individual is allowed to have, even if this is technically possible.

There are several, though, that don’t have formal restrictions limiting the number of cards, and general guidelines aren’t often published. In some cases, if you already have too many cards, either from the same issuer or in your overall credit history, some issuers may reject your application, while others may cap your total credit limit on all cards.

Chase

According to rumors, if an applicant has already been authorized for five credit cards from any issuer in the last 24 months, Chase would likely decline fresh credit card applications, even though this regulation has not been publicly announced. The Chase 5/24 rule refers to this.

Bank of America

An unwritten restriction may also limit the number of accounts approved by Bank of America’s customer care agents. You can only get two new cards in two months, three in a year, or four over the course of a year. This has become known as the 2/3/4 rule.

A 24-month waiting period appears to have just been implemented by Bank of America to limit how frequently you may obtain the same sign-up bonus for two of the same type of Bank of America credit card – but specific criteria may vary per card.

American Express

If you’re an American Express cardholder, you’re limited to five cards per individual. You may only get one of each of the welcome bonus incentives from American Express once in your lifetime.

Capital One

On the other hand, Capital One has a stricter limit on the number of cards you can have (two) and a stricter application process (one every six months). If you know the general guidelines of each issuer, you can avoid a hard inquiry on your credit report that only results in an unsuccessful application.

Factors to consider before applying for a new card

A higher credit limit could help your credit score

There are several elements that contribute to your credit score, and one of them is the proportion of your available credit that you’re utilizing. To put it another way, say you’ve got a $1,000 credit limit on all of your cards. The percentage of your credit card balance that you use will be 40% if you make $400 in purchases.

If, on the other hand, you open a new card with a $500 credit limit and do not make any more purchases, your credit usage ratio will drop to around 27%. Opening a new credit card may be a smart choice if it has a beneficial influence on your credit usage ratio, which should be kept under 30%.

Applying for too many cards at once could hurt your score

It’s called a hard inquiry when someone like a lender or credit card provider requests your credit report. FICO estimates that the average person’s credit score is reduced by fewer than five points as a result of these queries, but if you apply for many cards at the same time, your score may drop from “good” to “fair.”

Using a service like Credit Sesame before applying for a new credit card is a good idea. A soft query, such as checking your own credit score, has no effect on your credit report.

You’ll have more opportunities to earn more rewards

In order to maximize your points, it is important to use your credit cards in a planned manner. When it comes to cashback, the Blue Cash Preferred® Card from American Express offers 6% cashback at U.S. supermarkets (for the first $6,000 per year, after that just 1%), 3% at gas stations and eligible transit, and 1% on other purchases, so it’s worth considering if you spend a lot of money in those categories.

When you open new accounts, you may also be eligible for sign-up incentives. If you achieve the minimum spending threshold for the Chase Sapphire Preferred, you’ll receive 60,000 extra points. If you book through the Chase site, you might get up to $750 in travel expenses. You might establish a new credit card to expedite your travel plans if you’re planning a long journey.

Having too many cards can make it difficult to manage your finances

In order to maximize your points, it is important to use your credit cards in a planned manner. When it comes to cashback, the Blue Cash Preferred® Card from American Express offers 6% cashback at U.S. supermarkets (for the first $6,000 per year, after that just 1%), 3% at gas stations and eligible transit, and 1% on other purchases, so it’s worth considering if you spend a lot of money in those categories.

When you open new accounts, you may also be eligible for sign-up incentives. If you achieve the minimum spending threshold for the Chase Sapphire Preferred, you’ll receive 60,000 extra points. If you book through the Chase site, you might get up to $750 in travel expenses. You might establish a new credit card to expedite your travel plans if you’re planning a long journey.

There’s no reason to have more cards than you need

If you already have a few credit cards with excellent rewards in your primary areas of spending, adding another one may not provide much of a return on your investment. To put it another way, there’s a bigger possibility that one of your cards will get lost or stolen or that you’ll forget to use one of your older ones. If you do not use a credit card, the account may be closed, which might have a negative influence on your credit score.

Having more than one credit card is a good idea in many situations, but most people don’t need dozens. Open a new account only if you have a strong credit score, spending patterns, reward goals, and other financial considerations in mind.

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