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Credit Building

How many credit cards is too many?

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Credit cards can be powerful financial tools when managed responsibly, offering convenience, security, and the ability to build your credit. However, when it comes to determining the right number of credit cards for your specific financial situation, there isn't a one-size-fits-all answer. 

The ideal number of credit cards can vary based on your individual goals, financial responsibility, and personal preferences. It’s important to strike the right balance, especially with regard to how they may potentially impact your credit, as having multiple credit cards can have both positive and negative effects on your credit score.

Here, we’ll discuss some factors to consider when determining the number of credit cards that’s right for you.

Assess your financial responsibility and spending habits

While there's no specific number of credit cards that is universally considered too many, it can be important to assess your financial responsibility and spending habits with regard to managing payments across multiple credit cards. 

Ultimately, the number of cards you should have depends on your ability to manage them responsibly, so make sure to consider the following.

  • Payment management:


    If you struggle to consistently make payments on time or tend to carry balances and accumulate further debt, it may be best to limit the number of credit cards you have. Keeping track of multiple due dates can become challenging, leading to missed payments, potential penalties, and a negative impact on your credit score.

  • Budgeting and spending control:


    Understanding your spending habits and ability to maintain a budget can be crucial. If you find it challenging to control your spending and pay off credit card balances in full, it may be a good idea to limit the number of credit cards you have to avoid accumulating high-interest debt.

Consider your credit utilization ratio

It’s important to consider your credit utilization ratio, which is the amount of credit you're currently using compared to your total available credit. Generally, it's advisable to keep your credit utilization below 30% to maintain a healthy credit score. While it depends on your level of financial responsibility and history of credit card usage, having too many credit cards may tempt you to overspend and increase your utilization ratio.

Given that your credit utilization ratio is an essential factor in determining your credit score, here’s what to keep in mind.

  • Lower your credit utilization ratio:


    Having multiple credit cards can increase your overall available credit limit, which may help lower your credit utilization ratio, provided you aren’t prone to overspending or driving up your balance.

  • Balancing credit utilization:


    Consider your existing credit limits and expenses when deciding whether to open new credit cards. If you're responsibly utilizing a single card and managing your credit well, opening more cards may not be necessary to maintain a healthy credit utilization ratio.

Evaluate your credit history and inquiry impact

It’s important to evaluate both the length of your credit history and the impact that hard inquiries have on your credit score when determining the right amount of credit cards for you.

Given that both opening and closing credit cards can have a significant impact on your credit score, here’s what to consider.

  • Existing credit history:


    The length and quality of credit history can play a key role in determining creditworthiness. Closing old credit card accounts may reduce your overall credit history length, potentially impacting your credit score. If you have long-standing, well-maintained credit card accounts, keeping them open can contribute positively to your credit score.

  • Credit inquiries:


    Each time you apply for a new credit card, a


    hard inquiry


    is made on your credit report, and numerous inquiries in a short time frame can negatively impact your credit score. For that reason, it’s advisable to space out credit card applications to help minimize the impact.

Use credit cards to achieve your financial goals

Under the right circumstances, credit cards can be useful tools for accomplishing your financial goals. For some, having one or two credit cards may be sufficient for everyday expenses and building credit. However, if you're a frequent traveler or have specific rewards goals, additional credit cards could also be beneficial. 

Either way, it’s important to ensure that your credit cards align with your larger financial objectives. Here are a few points to keep in mind.

  • Building or improving credit:


    Whether you’re just getting started in your credit-building journey or looking to improve a score you wish was higher, a secure credit card can be a good place to start if you feel confident that you can manage it. The


    Varo Believe


    card can help get you started or give your credit a boost¹.

  • Rewards and benefits:


    Some credit cards offer rewards, cashback, or travel points programs that may align with your overall spending habits and financial goals. If you can benefit from the perks of multiple cards, it may be worthwhile to have several, provided you can manage them responsibly.

  • Specific credit card usage:


    If you require a credit card for specific purposes, such as business expenses or international travel, having an additional card dedicated to those needs may be beneficial. It may also help you to keep track of spending for specific needs, rather than using one credit card for all expenses.

Seek guidance when unsure

Still unsure about how many credit cards are appropriate for your situation? It may be a good idea to consider seeking advice from a financial planner or credit counselor. These professionals can provide personalized guidance based on your unique circumstances and help you make informed decisions regarding your credit card usage.

The number of credit cards you should have is not a one-size-fits-all answer. As discussed above, it depends on a variety of factors, including your financial responsibility, spending habits, long-term goals, and credit score impact. Ultimately, finding the right number of credit cards for you is about maintaining a healthy credit profile and aligning your credit usage with your current and future financial circumstances.

Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.

¹ Varo Believe is a secured credit card designed to help you build credit; however, a variety of factors impact your credit and not all factors are equally weighted. Building credit may take time and Varo Believe may be able to help when you consistently make on-time payments.


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