There's not a one-size-fits-all solution for the number of credit cards a person should own. However, it's generally a good idea to have two or three active credit card accounts, in addition to other types of credit such as student loans, an auto loan or a mortgage.
Just remember: The number of credit cards you own is less important than how you use them. Be sure that you can keep up with your existing monthly payments before considering a new credit card. Having multiple credit cards, along with other types of credit, can be a good thing, as long as you use each one responsibly. Two factors that contribute to your credit score are the number and type of credit accounts. If your goal is to get or maintain a good credit score, two to three credit card accounts, in addition to other types of credit, are generally recommended. This combination may help you improve your credit mix.
Lenders and creditors like to see a wide variety of credit types on your credit report. Keeping up with multiple credit accounts suggests to lenders that you understand how credit works and know how to manage the amounts you borrow. Many credit cards also offer borrowers access to special rewards programs. These might include cashback options for certain purchases, travel benefits or other types of rewards.
How many credit cards are too many?
Owning more than two or three credit cards can become unmanageable for many people. However, your credit needs and financial situation are unique, so there's no hard and fast rule about how many credit cards are too many. The important thing is to make sure that you use your credit cards responsibly.
Here are some things you should remember about credit, especially if you have multiple credit cards:
- Keep an eye on your balances.
- Avoid late payment fees by paying on or before the due date.
- If possible, pay off your credit card balances in full instead of only making the minimum payment.
- Check your credit reports frequently so that you see what lenders see.
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