Published in: Credit Cards | Feb. 6, 2020

Are You Better Off With Multiple Credit Cards or One Great One?

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With so many great cards out there, should you sign up for a couple or find just one that's ideal for you?

Today, there are tons of great credit cards on the market. Whether you want a travel card, a cash-back card, or a card that offers points to use toward merchandise, you can find a credit card that's a great fit for you. In fact, there are so many cards -- each with its own perks, pros, cons, and rewards program -- that you may consider using multiple cards for different purposes. 

While this is a good idea in some cases, there are also some big advantages to using just one really great card instead of switching back and forth between different ones for different kinds of spending. 

If you're deciding whether you should apply for multiple credit cards, this advice will help you make your choice. 

A businessman sitting at a restaurant table and swiping his credit card in the card reader being held by the waitress.

Image source: Getty Images

The benefits of having multiple credit cards

There are a few really good arguments for getting multiple credit cards, including the following:

  • You can max out your rewards: Different cards offer bonus perks for different things. If you have one card offering 5% back for gas, another offering bonus points for booking hotels, and a third that gives you extra rewards for restaurant purchases, you can be strategic about which card you use when. By doing this, you'll likely be able to earn a lot more rewards for each individual category of purchases than with one general-purpose card. 
  • You can take advantage of lots of different cardholder perks: Cardholder perks also vary from one card to another. If you have multiple cards, you can get lots of different cardholder benefits. For example, one card might offer rental car insurance and travel insurance, while another offers credits for booking rideshares or an extended warranty on purchases. 
  • You can keep your credit utilization ratio lower: Using more than 30% of your available credit hurts your credit score. And keeping your utilization as low as possible -- ideally, below 10% -- can help your score. If you have multiple cards and split your purchases among them, this makes it easier to maintain a low utilization rate. 

Of course, there are also some downsides, including:

  • You may have to pay multiple annual fees: This can get expensive. 
  • You have to remember which card to use for which purchase: This isn't always easy or convenient.
  • You could be at greater risk of identity fraud: It's harder to keep track of unauthorized charges on many cards 
  • You might be at greater risk of missing payments: It can be hard to juggle all the different due dates. 

Weigh the advantages against the disadvantages and compare them to the pros and cons associated with having one great card. 

The benefits of sticking to one great card

There are a few key reasons you may want to have only one card, including the following:

  • You can afford a card with a more expensive annual fee: Many of the best credit cards charge high fees for becoming a cardmember. You may not be able to afford to pay them if you have multiple cards that charge you. 
  • You can earn lots of rewards points more quickly: If you're trying to score a free ticket with a miles card or earn merchandise with a points card, you'll do so much more quickly if you have one card you use for everything. 
  • You can qualify for big-spender bonuses: Some cards offer extra perks, such as elite status in an airline or hotel loyalty program, if you hit certain spending milestones. It's a lot easier to hit these goals if you're using one card for everything. 

Unfortunately, you do have some downsides to think about as well:

  • You probably won't earn the maximum rewards on every purchase: If you're going to use just one card for everything, you may want to find one that offers the best overall rewards rate. This could mean foregoing bonus rewards on specific spending categories. Alternatively, if you get one card that rewards the spending you do the most, you'll likely end up with a lower rewards rate on all other purchases. 
  • You could end up with a higher credit utilization ratio: Even if you pay your balance in full, your credit utilization ratio could be high if the creditor reports your outstanding balance before you make payments. 
  • You'll get fewer perks and have less flexibility in how rewards are redeemed: You'll be able to redeem through just the one card's rewards program and will be able to take advantage of the benefits for only that particular card. Of course, you can alleviate this downside by picking a card that partners with other airline, hotel, or loyalty programs. 

Which option is right for you?

You'll need to weigh the pros and cons of both options and think about your spending patterns when deciding what's right for you.

If you can qualify for one great card that has tons of valuable cardholder perks and a rewards program well matched to your spending, you may be better off with just that card -- especially if you pay a high fee for it. Likewise, if you get a card that gives you extra perks once you hit a certain spending threshold, you may want to stick with using that card only. 

However, if your spending tends to be all over the place or you don't often spend on things card issuers offer bonus rewards for, you may want to opt for just one card that offers the most rewards or cash back for general spending. And this may also be the right option if you don't have the patience to keep up with multiple rewards programs and manage different cards. 

But if you want to get the absolute most rewards for every single dollar you spend -- and you don't mind doing a little extra work -- juggling multiple cards is the right approach. The same is true if you want to keep your credit utilization ratio as low as possible or if you like the perks a few different cards can provide you with. 

Whatever you decide, be sure to research the different cards available so you can find the best one -- or more -- for you.

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