Do You Have More Credit Cards Than the Average Person?

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How many credit cards do you have? Find out here how you compare to the typical American.

Did you know that most people have more than one credit card -- and in some cases, many more? The average number of credit cards varies by generation, as revealed in a recent study conducted by The Ascent. Baby boomers and Gen Xers have an average of four cards each, while millennials average three.

Of course, these are averages. Some people have none, while others have a wallet-full. In fact, across all age groups, 10% of survey respondents said they had six or more credit cards.

Having a lot of credit cards can be good, but it can also lead to problems. Let's take a look at some pros and cons of having tons of cards. Then we'll discuss things to consider when deciding if opening another card is the right choice for you.

Benefits of having multiple credit cards

Having access to many credit cards can be good for a few big reasons.  

  • Having multiple cards helps you increase your credit score with a positive payment record. You'll have lots of accounts to develop a strong history of on-time payments. Payment history is the single most important factor that determines your credit score, so this is a major advantage.  
  • Having multiple cards also means a better credit utilization ratio. Credit utilization ratio is the percentage of your available credit that you're currently using. It's another an important factor in determining your credit score. It should be below 30% to earn the best credit score -- and the lower, the better. With multiple cards, you should have a high total credit limit across all accounts, so achieving a good utilization ratio is easier. If you have six credit cards with a limit of $5,000 each, your available credit is $30,000. A balance of $3,000 across all six cards results in utilization ratio is just 10%. If you only have one card with a limit of $5,000 and you owe $3,000 on that card, your utilization ratio is 60%. That's way too high.
  • You'll have lots of credit available in case of emergencies. Having an emergency fund is best. But with only a single credit card, you could find yourself in a situation where your card is maxed out, you have no cash, and you're forced to turn to high-interest debt like payday loans. This is less likely to happen if you have more credit available.
  • You maximize your rewards or cash back. If the credit cards have different rewards programs, you can be strategic about which you use. This helps you max out the rewards points or miles you receive for each purchase.
  • You get access to many cardholder benefits. If the cards have different perks -- like airline lounge access or discounts at certain stores -- you can take advantage of varied benefits to get lots of cool stuff.

Disadvantages of having multiple credit cards

Unfortunately, there are also downsides to having multiple cards. Here are some of the biggest drawbacks of having tons of credit cards in your wallet.

  • Multiple annual fees: If some or all of your cards charge fees, you could end up paying a lot. Paying a fee is only worth it if the value of the rewards or perks outweighs the cost of the fee. The more cards you have, the less likely that you'll be able to earn enough rewards to offset the cards' costs. There's also a greater chance their cardholder benefits will overlap, getting you less bang for your buck.
  • Juggling multiple payments: When you have multiple cards to pay, it's easy to make mistakes and let a payment slip through the cracks. This can devastate your credit score.
  • Navigating different rewards programs: Keeping track of which card to use for which purchase can be a hassle. The challenge is compounded if your rewards points expire, as you'll need to keep track of when rewards must be redeemed.
  • Credit card debt risk: If you have multiple cards, you could get deep into debt if your spending isn't fully under control. The more you can charge, the greater the trouble you can get into.
  • Applying for cards can hurt your score: Each time you apply for a new credit card, there's a hard inquiry on your credit report. Too many hard inquiries could damage your credit score, making it more expensive to get credit in the future.

Do you have the right number of credit cards?

Ultimately, only you can decide if you have enough cards or if applying for one more is worth it. When deciding whether to get a new card, consider

  • the number of cards you already have,
  • the potential hit to your credit,
  • whether you can trust yourself to be responsible with the extra credit, and
  • if the rewards program or cardholder perks are really worth it.

Having more cards than the average person isn't necessarily a bad thing. But if you find you're regularly maxing out your cards or missing payments, it's time to put some of those cards away for good. You may not want to close those accounts, as this could drop your credit score, but you don't need to use them on a regular basis.

Having fewer cards than average is okay, too -- so long as you have one or two good cards for building your credit history and getting rewards in return for your spending.

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