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Bottom Line Up Front

  • There are both benefits and drawbacks to having multiple credit card accounts, and the right number for you depends on your financial situation.
  • Benefits include more flexibility in spending and rewards programs, and the increased available credit may boost your credit score.
  • Applying for or having too many cards could also reduce your score temporarily while having several cards can make bookkeeping errors or overspending more likely.

Time to Read

4 minutes

May 3, 2022

You’re probably familiar with the benefits of having a credit card: convenience, rewards, protection against unauthorized use, a way to build credit history—the list goes on. However, are there benefits to having more than one credit card? And if so, how many should you have? Read on to learn the benefits and drawbacks of carrying multiple cards.

Benefits

There are plenty of reasons to have more than one credit card. With multiple cards, you:

  • may improve your credit score. More credit card accounts gives you more available credit to use. And, if you have modest spending habits, you may be able to improve your credit utilization ratio, which is calculated by dividing what card balances you have by your total credit limit. A good credit utilization rate is a boon for your credit score.
  • can separate expense types by credit line. Do you run your own business? Carrying a second card for business expenses can make tax deductions a breeze—just keep your personal everyday spending and business purchases on separate cards for easy record keeping!
  • can maximize your rewards programs. If you’re hoping to maximize your perks, then consider carrying multiple rewards credit cards. For example, you could fund your dinners with a card that earns extra points at restaurants and pay for other expenses with a general cash-back card.
  • can keep a backup card. Sometimes a retailer only accepts one type of card (Visa® but not American Express®, for example). Sometimes you accidentally leave your main credit card in your car or on your kitchen counter. In either case, having a spare card on hand could be a lifesaver. 

Drawbacks

For all the benefits of having multiple types of credit cards, there are also some potential challenges. You could: 

  • see a temporary drop in your credit score. When you apply for a new credit card, a hard inquiry may be made on your credit file. This could temporarily knock a few points off your credit score. Opening a new account also lowers the average age of your credit accounts, which may impact your score. For this reason, you may want to avoid new credit card applications if you’re planning on applying for a loan in the near future. 
  • lose track of spending. Divvying your spending across multiple accounts can make it harder to keep track of how much of your money you’ve really spent. For example, 3 credit card statements with $400 balances each may give a different impression of your financial situation than $1,200 on a single credit card. To avoid overspending, get in the habit of checking your account balances on a regular basis—weekly, for example. 
  • mix up due dates. Since different cards may have different payment due dates, you’ll need to keep track to make sure you don’t miss any monthly payments. Fortunately, many credit card issuers allow you to set up automatic payments, so you won’t have to worry about missing a due date. You can also contact your issuer to see if they’ll let you change your due date to keep your different cards on the same schedule. 

So—How Many Cards?

Ultimately, it’s up to you to decide the number of credit cards you feel comfortable maintaining. It’s certainly possible to have an excellent credit score with just one credit card and you may also save on annual fees, but having multiple cards may suit your spending habits better and enable you to maximize your rewards strategy. If you’re unsure about whether or not you have the right number of cards, you can access a free credit report from Navy Federal Credit Union’s Mission: Credit Confidence® Dashboard to see if you have a warning about having “too many open revolving accounts.”

If you’re ready to open an additional credit card, explore our credit card offerings at Navy Federal to find one right for you.

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Disclosures

The Navy Federal More Rewards American Express® Card is issued and administered by Navy Federal Credit Union. American Express is a federally registered service mark of American Express and is used by the issuer pursuant to a license.

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.