How many credit cards should I have? Experts share their tips

There are so many different credit card options – so how many should you have in your wallet? And what are the benefits of having multiple credit cards?

This content is sponsored by PenFed Credit Union, federally insured by NCUA.

There are so many different credit card options – so how many should you have in your wallet? And what are the benefits of having multiple credit cards?

The average American has 3.06 credit cards, according to Wallet Hub, although that number can certainly fluctuate depending on factors such as age, credit score, income and debt. Determining the right number for you depends a lot on your lifestyle as well as your goals, note the experts at PenFed Credit Union.

It’s a good idea to have multiple credit cards, in general. Using multiple credit cards can give you backup payment methods, different savings or rewards, a more diverse credit report, and help you manage cash flow more effectively, says PenFed Credit Union.

“What matters most with credit cards is how you manage them – that you make full and on-time payments consistently,” said experts at PenFed Credit Union, adding that there is no There is no legal limit to the number of credit cards you can have.

Multiple credit cards can sometimes improve your credit score by increasing the available credit you have and giving you more lines of credit. Understand that multiple credit cards can also hurt your credit score. For example, opening too many accounts too quickly or not making regular card payments can cause your score to drop.

Using multiple credit cards can create a larger credit file, which helps you build your credit. Credit bureaus often recommend that people have five or more lines of credit, not all of which are credit cards. But each month, when payment information comes from every credit card or loan you pay on, you create a payment history that benefits you, notes PenFed.

Having multiple credit cards increases your total amount of available credit and also keeps your credit usage low. Credit usage is the percentage of your credit that you are using.

“Lower credit utilization raises your credit score,” PenFed experts say. “In fact, people with the highest credit scores typically use less than 10% of their available credit.”

Using multiple credit cards can help you get the best terms for each transaction. This means you can get the best rewards and all the shopping categories you need.

“For example, you could have a cash rewards card for everyday purchases and a travel rewards card for family vacations,” PenFed experts noted.

Have you ever been in a situation where your debit or credit cards are lost, compromised, frozen or stolen? Having multiple credit cards means that if you can’t use one card, there are backup options readily available.

Multiple credit cards can also make certain purchases more convenient. Some companies only accept certain credit cards, and having two or more cards from different networks will give you a way to pay anywhere, PenFed experts point out.

So how many credit cards is the right number for you?

PenFed Credit Union experts recommend considering your spending habits first. For example, do you pay for things with debit cards or credit cards? If you prefer to charge all your expenses and pay off your credit card at the end of the month, you may need more credit cards to spread out your expenses and get the best rewards.

If you were looking to establish your credit score, be aware of your debt, PenFed said.

“You may think another credit card is the right option, but there are other ways to build credit that might be better suited to your situation,” PenFed said. (Learn more about some of these options here.)

Although credit cards can help cover emergencies, it is important to be cautious in always turning to credit cards for these types of events. Credit card interest and charges can make emergencies more expensive in the long run. It may be best to turn to an emergency fund for these situations or find out if your credit card offers a 0% balance transfer for 12 months or more, which could offset an unexpected expense.

The number of credit cards you have can be an important step on your path to financial well-being, experts at PenFed Credit Union say.

“If you’ve decided it’s time to add another credit card to your wallet, the good news is that there are plenty of great options to help you build your credit, maximize your rewards, and reach your goals. most important financial goals,” PenFed said.

Learn more on the PenFed Credit Union website about everything you need to know about how many credit cards are best for you. PenFed Credit Union is federally insured by the NCUA.

About Chris C. Hairston

Check Also

New Cards southpaws make their mark

ST. LOUIS — Saturday marks International Left-Handers Day, a celebration that could take on new …