5 Signs You Have Too Many Credit Cards

When you have good credit, you can qualify for some amazing credit cards. Some rewards cards allow you to earn 2% to 5% or more back on your purchases. Many of them also have big sign-up bonuses for new cardholders, so it's understandable why you may want to open more than one of these cards.

There's nothing wrong with having several credit cards, if you can manage them. If not, those cards could be more trouble than they're worth. Here are the most common warning signs that you have too many credit cards, and what you can do about it.

1. You're missing payments

With multiple credit cards, you're also going to have multiple payments to manage. They won't all be due on the same day, either. One could be due on the 5th, another on the 11th, another on the 24th, and so on.

While you should do your best to avoid it, missing a single credit card payment isn't the end of the world. Most card issuers will even waive the late fee if you contact them and ask. But if you've forgotten to make your payment multiple times, you may be biting off more than you can chew with your credit cards.

You could set up automatic payments to solve this. Another option is calling up each issuer and seeing if you can get all your cards changed to the same due date.

2. You're spending more and more

One of the dangers with credit cards is that it's easy to borrow money and pay it back later. When you have lots of credit cards, you have more buying power, which can make it even more tempting to spend money you don't have.

No matter how many cards you have, it's important to stick to a spending plan. If you've noticed that you aren't able to save as much money as before, see if it's because you're spending more on your credit cards. People often don't realize how much they're spending until they review their recent credit card statements.

3. Annual fees are hurting your finances

Some of the best credit cards have annual fees. Paying an annual fee can be worth it, since these cards tend to have more perks.

But annual fees still cost you money, and they can add up if you're paying several of them. An annual fee should never be a financial burden. If paying annual fees is keeping you from reaching your savings goals or leaving you unable to cover your bills, get rid of some cards. Either downgrade credit cards to no annual fee versions, or close them entirely.

4. You're carrying a balance

Credit cards have high interest rates. The average credit card interest rate recently reached a record high of 22%. On a $5,000 balance, interest would cost you about $1,100 per year. You're basically paying a premium on those purchases, just because you didn't pay them off in full.

You're only charged interest on purchases when you carry a balance from month to month. If you've found that you've started to do this as you've opened more credit cards, then those cards could be causing you to adopt some costly financial habits.

5. You have lots of unused rewards

One of the most popular reasons to have multiple credit cards is to maximize your rewards. By using multiple cards, you can earn more sign-up bonuses and earn bonus rewards across more spending categories.

Credit card rewards only save you money when you use them. If you have lots of points and miles sitting around, they're not doing you any good. Find a way to cash them in, and then stick to cards with rewards you can easily use in the future.

What to do if you have too many credit cards

The most effective option when you have too many credit cards is to close some of them. You might have heard that this hurts your credit score, but that isn't quite how it works. Positive credit accounts remain on your credit history for 10 years. So even if you close a credit card, it can continue to benefit your credit score for a decade.

It's still a good idea to keep your oldest accounts open, just so you never lose those from your credit history. But you don't need to be worried about closing credit cards. And if having too many cards is causing issues for you, closing some is probably the safest solution.