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How Many Credit Cards Should You Have?

Whether you’ve been collecting credit cards since you turned 18 or you’ve been using the same one your whole life, at some point you’ve probably wondered, How many credit cards should I have?

If you’ve been hanging around here for a while, you know we’re not big fans of the ol’ credit card. In fact, we’re not fans at all. And for good reason: Credit cards keep you stuck in the cycle of debt.

Sure, they may seem harmless at first. (Just ask the eight in 10 Americans who own a credit card.1 Yeah, card companies are doing a heck of a job convincing people they need them.) But after a few too many swipes and some missed payments, you could be in for a world of hurt . . . in the form of interest payments.

So today, we’re here to air out the dirty laundry. How many credit cards is too many? Does having multiple cards help or hurt your credit score? And do you really need a credit card in the first place?

Buckle up, folks. It’s going to be a wild ride.

How Many Credit Cards Should You Have?

It depends on who you ask. But since you’re asking us, the answer is zero. (More on that later.)

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The 2021 State of Credit report by Experian found that Americans have an average of three credit cards, each with a balance of $5,525, and two store cards, each with a balance of $1,887.2 Ouch.

If you ask industry experts how many credit cards you should have, most say you should have a credit card, and the number you choose to own depends on how good you are at managing them. These “experts” will also say you need credit cards to build credit, deal with emergencies, and earn rewards on spending. But none of that is true.

If you go searching for reasons why you need a credit card (or multiple credit cards), you’ll definitely find them. Ask three of your closest friends this question, and you’ll probably get the same answers. Why? Because the credit card industry is really stinking good at marketing. And over the years, the lies these companies have used to pad their pockets have taken root in our minds as truth.

Here are the top five lies the credit card industry uses to get you to take the bait.

Lie #1: Credit cards are great for emergencies.

If we put a dollar in your piggy bank every time we heard this, you’d be able to retire today. Around one in three Americans (36%) said they would be unable to cover a $400 emergency.3 Which means they’re turning to “quick solutions” like credit cards to bridge the gap.

That’s why you need an emergency fund. Instead of going into debt to replace your furnace that went kaput, you can dip into your fund and pay yourself back later. Then you don’t have to worry about money stress adding to an already stressful situation. Learn how to start building your starter emergency fund today.

Lie #2: Credit cards are the only way to get cash back and rewards.

It’s true. You can rack up credit card rewards and even cash-back offers with every swipe of that shiny piece of plastic. But the temptation to overspend with a credit card is intense, and too many people give in to it . . .  just for a few measly points they may not even use. What a rip-off!

Here’s why it’s a lie: You can earn cash back and rewards when you spend with a debit card too. That’s right, with a little research, you can find a debit card that gives you rewards when you use it. Not only that, there are plenty of coupon apps that will help you earn cash back every time you make a purchase as well.

Plus, no millionaire ever said they built their wealth using cash-back and rewards points from credit cards.  

Lie #3: You need to use credit cards to build your credit.

It’s true that credit cards and your credit score are thick as thieves. So, when you use a credit card wisely (if that’s a thing), you improve your score over time. When you use it poorly or get yourself into a lot of debt, your score goes down.

But it’s not as black and white as it sounds. With credit cards and credit scores, there’s a lot of gray area. (More on that later.) Here’s what you need to know now: The thing that most affects your credit score is your payment history (aka making your payments on time for a long period of time.) The reality is, you don’t actually need a credit card to build your credit score, buy a house, rent an apartment, or rent a car. And get this: When you’re out of debt, living on less than you make, and building wealth . . . you don’t need a credit score either.

Lie #4: You deserve to have the things you want right now.

We live in a culture where you can get anything you want sent right to your door within a day or two. You can even have ice cream delivered if you don’t feel like leaving your house! It’s called instant gratification. But when you use a credit card to buy things you want right now (but can’t afford), you’re only asking for trouble. And that trouble will lead you straight into the open arms of debt.

Lie #5: You have to have a credit card to get by in the world.

Experian’s latest data tells us that most Americans have an average of three credit cards. But while it seems like most people have bought into the credit card game, you don’t have to join them. You can actually live in this world without a credit card. And it’s not too late to start. Yup—you can stop playing right now. Today.

Here’s the deal: The credit card industry doesn’t actually care if their cards land you in debt. In fact, they hope you’ll miss a few payments so your late fees and bumped up interest rates can make them that much richer. Remember, they want to make as much money off you as they can.

So, if you really want to know how many credit cards you should have, it’s zero. Yup—zilch, none, nada. Absolutely zero. 

How Many Credit Cards Are Too Many?

One. One credit card is too many. Why? Because you’re relying on something else for security when you can rely on yourself. To put it simply: Instead of borrowing more money and going through the stress of paying it back . . . why not just pay cash (or at least debit)?

After all—cash is king. Using an envelope system for your cash or using a budgeting app to track your debit card transactions will keep your finances in check. Trust us . . . using money you don’t have to buy stuff you don’t need always ends poorly.

Does Having Multiple Cards Help Your Credit?

It depends. Your credit score is what lenders use to decide how much money to loan you, and it’s based on how you’ve handled debt in the past. (That’s why we like to call it the “I love debt” score.)

If you have a good credit score (670 to 739) or even an excellent score (800 to 850), you’ll have credit card companies bombarding your mailbox with offers nonstop. And if you have a poor credit score (somewhere in the 300 to 579 range), you’ll have a harder time being approved for credit cards and major purchases like cars, apartments and homes.

When credit card companies check your score, it’s called a hard inquiry. Every time you sign up for a new card, this hard inquiry dings your score a little bit and your credit might drop a few points. If you’re signing up for card after card, your score will definitely take a hit. (More on that later.)

Will Too Many Credit Cards Hurt Your Credit?

Believe it or not, your credit score is a delicate thing. Like we said, if you open too many cards at once, that will definitely ding your score. But even if you don’t have any debt at all . . . well, that dings your score too. What credit companies want to see is a healthy relationship with credit (healthy for them, not you)—over a long period of time.

Having an old credit card you don’t use isn’t enough. You’ve got to show them you use it, won’t abuse it, and will keep it around for a while. Tough crowd.

Another thing credit reporting agencies take into consideration is your credit utilization rate. This rate is dependent on how much of your total credit you’re actually using (or utilizing).

But here’s where it gets tricky . . . they don’t actually want you to spend up to your credit limit. If your limit is $10,000 and you’re using $9,000, you’re utilizing 90% of your credit. In the world of credit scores, that’s a big no-no. They actually want to see you using less than 30% of your total limit. Why would a credit company tempt you with a higher limit and ding you for using it? If that sounds like a trap, that’s because it is. The lower your credit score, the more incentive you have to take on even more debt to try to improve it.

What Will Happen If You Open Too Many Credit Cards?

Remember, if you open too many credit cards in a short amount of time, you’ll set off some alarm bells at your credit card company—and your credit score will get a small beating from all those hard inquiries. Credit card companies know there are people who try to beat the system by racking up as many points, rewards and promotional offers as they can . . . just to turn around and close their cards. And as you can imagine, the big wigs don’t want to be taken advantage of. (They’re the ones who are supposed to be taking advantage of you, right?)

But it doesn’t have to be this way! Instead of worrying so much about a credit score, why not live without it? When you dump that credit card debt and live on less than you make, you’ll realize just how little your credit score matters. When you’re free from the chains of debt and have saved enough to retire (and give), you won’t have to worry about the scoring game.

Want to hear more? Check out The Fine Print podcast with George Kamel. In episode seven, he investigates the dirty truth behind your credit score. And what he finds may surprise you. Watch or listen here.

Are the Benefits and Rewards Really Worth it?

Everyone loves free stuff. And the genius of credit card rewards is that you can earn them with just a swipe. But here’s the problem: Those precious points, airline miles, rewards, cash-back opportunities . . . they aren’t really free. You (and your neighbors) are paying for them with interest and fees! Yup—the system is rigged.

No matter how careful and detail-oriented you think you are, one missed payment on your quest to beat the system will have the system beating you. It’s just not worth it. Especially if you remember how much money you have to spend just to get a plane ticket or two. (You’re better off just buying it outright.)

Why You Don’t Need a Credit Card

Plain and simple: Life is better without credit cards.

When you’re using spending tools that lead to debt, you can’t be surprised when you actually end up in debt. Choosing to pay with a credit card sets you up to overspend—or potentially miss a payment—and get caught in a constant cycle of debt. And even if you’re just using a credit card to get those points and miles, you’re still a slave to spending with it.

But when you spend cash (or your debit card), you can only spend what you have in the bank. There’s no going into debt when you spend with the money you have. When it’s gone . . . it’s gone.

Are you ready to live freely? Are you ready to stop worrying about credit card payments? Are you ready to leave that worry- and stress-filled life behind?

If so, it’s time to cut up your cards, pay off your debt, and take control of your money once and for all. Don’t know where to start? Don’t worry, we won’t leave you hanging. Take our quick three-minute assessment. You’ll share a little about your life and money goals, and we’ll give you a step-by-step plan to get from where you are to where you want to be.

And if you want to take control of your money once and for all, check out Financial Peace University. It’s a nine-lesson course that teaches you how to save for emergencies, get out of debt, and prepare for a financially secure future—no credit cards or credit score needed. Get it here.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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