Why People With a Credit Score of 800+ Have an Average of 10 Credit Cards

by Maurie Backman | Updated July 21, 2021 - First published on Aug. 16, 2020

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A table of four paying the bill with a credit card at a restaurant.

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If you think having multiple credit cards is a bad idea, you're wrong!

Americans have a collective 511.4 million credit cards, according to a new research study by The Ascent, and the average consumer has four. But believe it or not, it may actually be in your best interest to amass a larger collection of credit cards. Here's why.

The benefit of having multiple credit cards

While 61% of Americans have at least one credit card, people with higher credit scores tend to have more. In fact, a lot more. The average consumer with a credit score of 800 or higher -- considered "excellent" -- has 10 revolving credit accounts.

At first glance, that may be surprising. You'd think a greater number of credit cards would mean more debt. But the benefit of having multiple cards is racking up a higher credit limit.

Why is that important? Among the factors that go into calculating your credit score, credit utilization carries a lot of weight. Credit utilization means the amount of available revolving credit you're using (and when we say "revolving credit," we're talking about a credit line like you'd get with a credit card, as opposed to a loan with a fixed monthly payment). A utilization ratio of 30% or less will help your credit score improve or stay strong, whereas going above that 30% mark could hurt your score.

Say you have three credit cards, and each gives you a spending limit of $1,000, for a total of $3,000 across all three. For your credit utilization ratio to stay in favorable territory, you'd need to limit your spending to $900 (the 30% mark) or less at any given time. But when you get 10 credit cards, each with a $1,000 limit? Now you're free to spend $3,000 at once without hurting your score.

And there's the link between strong credit and number of credit cards. The more cards you have, the easier it is to keep your credit utilization ratio at or below 30%.

The danger of having too many credit cards

You may be thinking, "Wow, in that case, I'll go out and apply for a bunch of credit cards."

Not so fast. While having multiple credit cards can help your credit score, it only works if you know how to use all those cards responsibly. If you apply for nine more credit cards and max them out, you'll not only risk landing in a world of debt, you'll also damage your score a couple of ways -- first, by racking up too high a utilization ratio, but also by potentially falling behind on your payments and getting dinged for late fees. (Your payment history is actually the single most important factor in calculating your score, and even one late payment could have severe consequences.)

If you're going to hold multiple credit cards, pledge to only charge enough on each one to keep your accounts active, and only charge necessities. You might, for example, decide to use one credit card for groceries, one for gas, one for your phone bill, and one for your subscriptions and streaming services. That way, you're only charging expenses that are already part of your budget. (And if you go this route, maximize reward programs. If one card gives you 3% back on gas while the rest give you 1%, use that card to fill up your car.)

Also, though having multiple credit cards could help your credit score, don't make the mistake of applying for too many at once, because doing that could actually hurt your score. Each new credit card application will count as a hard inquiry on your credit, which can bring your score down slightly. But a few of these slight dings can add up to a major one. A better bet is to apply for a new card every three to six months, so you don't have too many hard inquiries on your credit in too short a time frame.

Sometimes, less isn't more

While having a larger number of revolving credit accounts gives you more flexibility and could help your credit score, that doesn't mean everyone should have 10 credit cards, or anywhere close to that. If you're already in debt or have a history of going overboard on spending, then you may want to stick to just one or two credit cards for emergencies, even if that means having a lower credit limit. That way, you're less likely to dig yourself into a deep financial hole.

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