Can You Have Too Many Credit Cards?

When you have looked at your credit history and your credit score, you may ask ‘Can you have too many credit cards?’ If you own a lot of credit cards you will have benefits, but you may also have some disadvantages. You might have a card from your favorite department store that offers a percentage discount for using the card. You may have a card that gives you a few cents off each gallon of gasoline if you use a specific card. You may have a card that awards you with points for using the card to make purchase. These could very well be beneficial to you if you are not losing the benefits your rewards by paying too high rate of interest. Some cards even charge an annual fee for the use of the card. You will need to consider all the factors that use of the card entails before you can determine if you are benefitting from its use or if it is costing you money in the long run.

The recommendation is that you have no more than three cards, and one of the cards should be the primary one that you use. The primary card would need to be one that has universal use. You could not use a card issued by a company that markets and restricts the use of the card to just gasoline purchases for other emergency uses. It is never a good idea to ‘max out’ or charge up to the limit on the card. But, if you do, you will need to use the second card you have until you have paid down the balance on your primary card. You can have too many credit cards if you are not restricting your purchases to just one or two cards.

You can have too many credit cards with open accounts and you may have a lower credit score as a result. If you have too much debt on the cards and if you are making late payments then you will negatively impact your score. If you have the assets and the income, without a large percentage of the income allocated to debt payment, it doesn’t really matter how many credit card accounts you have open. If you decide to start closing some of the accounts because it is just too difficult to keep track of multiple cards or because you want to pay down debt and not be tempted to use the card, then you need to follow the right process. Close the accounts that do not have a balance first. Then if you still want to downsize, close the accounts that you rarely use. Pay the entire balance and cut up the card. Keep in mind that you will want to keep the card that you have had the longest because this is the one that is most important to your credit history.

You may have cards that require an annual fee. If so, you may want to close those accounts and rely on the companies that issue cards that have no annual fee. There has been an increase in fraud associated with credit cards and identify theft is easy for the criminal to perpetrate if you are not careful with how you distribute your personal information. You can have too many credit cards and you will be an easier target for a criminal that is stealing identity information.