Is it bad to have multiple credit cards

By Matt Mayerle
Modified on May 9, 2023
is it bad to have multiple credit cards

A credit card can be a useful tool if used correctly. If not used correctly, it can lead to large amounts of debt, low credit scores, and other consequences. According to data from TransUnion, the average American has 2-3 cards.1 But is it bad to have multiple credit cards? Read on to find out! 

Can Multiple Credit Cards Lead to Bad Credit?

Credit cards are easy to get and can allow you to purchase things that you may not be able to without them. This is why many people get in trouble with their credit card debt. Having high balances on several cards will no doubt hurt your credit score. 

Having multiple cards won’t necessarily lower your score, but having high balances on them might. If you have several cards and they all have very low, or ideally no balances, then you actually might be helping your score. 

This is due to something called your “credit utilization ratio.” This is the amount of credit you’re currently using, compared to how much credit is available to you. 

So if you have one credit card with a maximum balance of $1,000 and you have a $500 balance on it, then your credit utilization ratio is 50%—because you’re using half the credit available to you. 

Having low credit can make it hard to qualify for credit cards, but you can look at bad credit loans instead.

Is It Better to Have Multiple Cards or Cancel Them?

So the question remains, should you keep them open even if you’re not using all of them? This brings us back to your utilization ratio. If you have a card or two with a zero balance, and you don’t plan to use them in the future, it actually helps your ratio to keep them open. 

It’s beneficial to your overall credit score to keep your utilization ratio under 30%. The lower it is, the better. And having multiple zero-balance cards will lower your ratio. 

Credit Cards With a Zero Balance

It makes sense that having less overall debt would mean you’re more financially stable. This is an important factor when it comes to calculating your credit score. And it’s an unfortunate fact of life that credit cards often lead people into large amounts of debt. 

While it may be beneficial to your credit score to keep a couple of cards open with a zero balance, you have to know that you can keep them at zero. If having those cards open and available will lead to racking up more debt, then it isn’t worth the risk and you should close them. 

How Many Credit Cards Is Too Many?

The basic rule of thumb with credit cards is that how you use them is more important than how many you have. 

That being said, be careful when opening and closing accounts. When you open a new credit card, the company may perform a credit check to make sure you’re trustworthy. Sometimes these credit checks can lower your score by a few points. As long as you’re not doing this very often, it shouldn’t affect your credit too much. 

So, is it bad to have multiple credit cards? The short answer is no. The more thorough answer is that multiple cards can help you or hurt you depending on how you’re using them. Unlike installment loans, credit cards make it easy to overspend. Do your best to keep your overall credit card debt low and your balances at zero, and you may see your credit improve.  



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