Credit Cards: How many is too many???

You may sift through your stack of credit cards and wonder if you have too many. Or, if you're considering opening new credit accounts, you want to be sure it won't affect your credit before doing so. The best number of credit cards is one of those questions that doesn't have a one-size-fits-all type of answer.

 

Do You Have Difficulty Managing Credit Cards?

 The more credit cards you have and actively use, the harder it will be to manage your payments. You need to have the ability to track your credit cards, including payment due dates, interest rates, fees, and charges you've made. This is easier with just a few credit cards – like one to three – but becomes increasingly difficult as the number of credit cards exceeds five. Still, it depends on your own ability to manage your credit cards.
You can use an online tool like TrackCards to help manage your credit card payments.

Do You Have Too Many Cards?

If you're just starting out with credit or rebuilding your credit, one credit card is enough. You need successful experience managing a credit card before taking on additional credit responsibilities. As you get that successful experience and consider opening additional credit cards, think about your ability to pay and track your credit cards.  Before you close any credit cards, first make sure the cards you close won't hurt your credit score.

Is Your Credit Utilization High?

Your credit utilization (30% of your credit score) is your total debt divided by your total credit. So, for example, if your credit card limits total $5000 and your credit card balances total $2000, then your credit utilization is 40%. Ideally, your credit utilization should be less than 30%.  The more credit cards you have, the more temptation you have to charge purchases. As your credit card balances increase, your credit utilization goes up. So, one way to keep your credit utilization down is to keep your number of credit cards and balances down.

Just keep in mind that there is not a set number... only you can decide how many cards you can balance!

Information found at http://credit.about.com/od/usingcreditcards/a/numcreditcards.htm