You Should Have at Least 2 Credit Cards. Here's Why

by Lyle Daly | Updated July 21, 2021 - First published on Feb. 10, 2020

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There's no magic number when it comes to credit cards, but two's a smart minimum.

If you don't have much experience with credit cards, at some point you've probably wondered how many cards you should have. Is one enough? Is it bad to have a lot of cards?

These are all common questions, and the truth is that there's no perfect number of credit cards to carry. However, the minimum number of cards you should have is two.

You need one credit card to build your credit score, but there are a few important reasons why you should carry at least one more.

1. To have a backup card

My father recently mentioned that someone had tried using his credit card number for a purchase on the other side of the country, even though he hadn't lost the card. His credit card company mailed him a replacement, but until that arrived, he had to use his debit card or cash.

Therein lies the problem. When you only have one credit card, you don't have a backup if it gets lost or stolen, or if the card number is compromised. In any of those circumstances, you'll be stuck using less secure payment methods that don't earn you any rewards.

2. To earn more rewards

While you can earn rewards with a single credit card, one of the best ways to boost your rewards is to add another card to the mix. A popular strategy is to combine a card that earns bonus rewards in certain spending categories with a card that earns a high flat rate on all your spending.

Imagine you have a card that earns 3% back on dining and at supermarkets, and 1% back on everything else. You then get a card that earns 2% on every purchase. By using the second card on all your non-dining-and-supermarket expenses, you've doubled your rewards. Another option is to get multiple cards with bonus categories so that you earn extra back on a wide variety of expenses.

3. To carry cards from two different payment networks

Every credit card is part of one of the four payment networks: Visa, Mastercard, Discover, or American Express.

However, not every merchant accepts payments from all four payment networks. Visa and Mastercard have the highest acceptance rates. Discover is almost as widely accepted in the United States, but not internationally. American Express has the lowest acceptance rates both domestically and internationally.

If you have a Discover or American Express card, it's a good idea to also get a card with Visa or Mastercard. That way, you'll have another option if you visit one of the many merchants that don't accept your card.

4. To reduce your credit utilization

An important factor in calculating your credit score is your credit utilization ratio. This is a measure of how much of your total available credit you're using, and it comprises 30% of your FICO® Score.

Here's an example -- you have one credit card with a $200 balance and a $500 credit limit. Your credit utilization ratio is 40%, which is somewhat high and could negatively affect your credit score.

Then, you get another credit card with a $500 credit limit. Your total available credit has risen to $1,000. That same $200 balance now only results in a credit utilization of 20%, and your credit score increases.

But make sure you don't use this extra credit as an excuse to spend more, because that defeats the purpose. You should keep the same spending habits as before, except you spread your normal purchases across two cards instead of one.

It takes two

While one credit card is enough to earn rewards and build your credit score, carrying a second card brings several benefits. You'll have a backup card in case one is compromised. You can earn extra rewards. You can pick cards from two different payment networks. And you'll have more available credit, which can also help your credit score. Those perks make it well worth picking another card to add to your wallet.

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