Is it Better to Have Multiple Credit Cards or One?

Emergency Use

It is generally a good idea to have at least one credit card available for use in an emergency. If you usually spend with cash or debit, then having one credit card for emergencies is sufficient. On the other hand, if you use credit regularly, you should have at least two cards so you can reserve one for use just in emergencies. You would not want to find yourself with a maxed-out credit card and no backup when you need to make car or home repairs.

Having multiple credit cards can help your credit score, but only if you manage them responsibly. You need to stay on top of the bills and due dates so you do not miss payments. In addition, Bank of America suggests keeping your balance on each credit card below 50 percent of the card's limit to avoid hurting your credit score. Having multiple cards allows you to distribute your balances and keep your utilization on each card low, but it also means you have to pay attention to more paperwork and have more potential to damage your score.

Credit card rewards programs can be either an argument for just one card or an argument for multiple cards, depending on the type of rewards and how you will use them. If it will take you a long time to accumulate enough points to obtain your reward, as is often the case with airline miles, spending on one card instead of spreading it out will increase the likelihood that you will get to redeem the reward before your points expire. On the other hand, having multiple rewards cards can help increase your benefits. For example, some cash-back cards offer higher bonuses in categories that rotate every few months. If you have a few different cards and spend strategically, you can earn the high bonuses across more categories.

In general, the more credit cards you have, the more you can buy. If you only have one credit card and get a new one, you suddenly have access to a credit line that you did not have before. If you need the credit line and will use it responsibly, this is an argument for multiple cards. However, if you will just spend irresponsibly and accumulate more debt than you can afford, you should probably stick to just one card.