How Many Credit Cards Is Too Many?

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While it's a good idea to have at least one or two credit cards in your wallet, how many credit cards is too many? For some people, juggling multiple credit cards isn't a problem -- it can even help keep their credit utilization ratio down. For others, having multiple cards can lead to overspending, debt, and a damaged credit history.

How to know if you have too many credit cards

The best credit cards come with a host of benefits, from fraud protection to lucrative rewards. Opening multiple credit cards can be tempting. Before you get a new card for the sign-up bonus or a higher credit limit, though, make sure all that available credit isn't going to land you in credit card debt.

If you spot any of these red flags, chances are very good the number of cards you have has gotten out of control.

You can't keep track of your payments

How many credit cards is too many? For starters, if you're finding it difficult to keep track of how much you've charged and when payments are due, you have too many credit cards.

Juggling multiple credit cards can make it challenging to ensure you have the cash to pay off each card on time. If you miss a payment, your credit score could take a huge hit. Plus, you could end up in credit card debt.

As soon as you find you can't remember all your credit card due dates or have no idea how much you've charged on multiple cards, you know the number of cards you have is too many.

Your credit score is suffering because you keep applying for cards

Another way to answer the question "How many credit cards is too many?" is by checking your credit report. If you see a lot of new inquiries on your credit history, you might have too many cards. These new inquiries can drag down your credit score.

Each time you apply for a new credit card, you shorten the average length of your credit history. You also get an inquiry on your credit report that will stay there for two years. Both of these things can hurt your credit score. The more inquiries you have and the more new accounts you open, the more damage you'll do.

If you notice your credit score is falling due to new credit, it's definitely time to stop applying for new cards.

You find yourself maxing out the cards you have

If you find yourself maxing out every credit card you have, the answer to "How many credit cards is too many?" might be one card.

While increasing your credit limit can help with your credit utilization rate, if you're not paying off your balance in full each month, you're accumulating debt and paying hefty interest fees. Getting yourself deep into credit card debt could leave you paying off bills for years to come. Consider closing your credit cards if you can't get your spending under control.

You're paying a bunch of different annual fees

Sometimes the question isn't, "How many credit cards is too many?" but "Am I using the right credit cards?"

Many credit cards have an annual fee, some of which could run you as much as several hundred dollars annually. This can be worth it if you're earning lucrative rewards and taking advantage of the card's benefits, but if you're paying for credit cards you barely use, you're wasting money.

You can't keep track of all of the different rewards programs

Many people open new credit cards to try to take advantage of rewards programs. But every credit card works differently when it comes to earning bonus rewards.

How many credit cards is too many? If you have a wallet full of cards and it takes you 10 minutes with a flowchart to figure out which one to use to pay for groceries or gas in order to maximize your points, cash back, or miles, you've made your life needlessly complicated.

Instead of trying to wring every dollar out of every rewards credit card, find one or two good cards that best reward the spending you do most and skip the rest.

What to do if you have too many credit cards

If you've pondered the question "How many credit cards is too many?" and come to the conclusion that you might have more than you should, you have several options for fixing the problem.

If you have no-annual-fee credit cards, you could just opt to stop using all but one or two. Pay off the remaining balance on the cards you don't want to actively manage anymore, then stick them out of reach in the back of a drawer.

If you're paying an annual fee for a card you barely use, call your creditors and see if you can downgrade to a no-annual-fee card without losing the account's credit history. Some creditors let you do this. If it isn't an option, it may still make sense to close the card and avoid further fees, even if it causes a short-term hit to your credit score.

If you're struggling not to max out the cards you have, the question might not be "How many credit cards is too many?" Instead, you might need to ask yourself whether you should have a credit card at all. Closing as many of your cards as possible makes sense to eliminate temptation. You'll have to pay off the balances, but if you want to close the accounts out right away and stop worrying about them, consider consolidating the debt from multiple cards using a balance transfer. You can also do this with a personal loan.

Don't get stuck with too many credit cards

To avoid getting stuck with too many credit cards, resist the temptation to open a bunch of new ones just to get sign-up bonuses. While it's OK to do this occasionally if you see a really awesome perk for new accountholders, don't be tempted by every offer you see. If you already have too many cards, consider implementing some of the suggestions in this article so the plastic in your wallet stops weighing you down.

About the Author

Elizabeth Aldrich

Elizabeth is a personal finance writer specializing in credit cards, debt repayment, and small business. Her work has appeared on The Motley Fool, MSN Money, Yahoo! Finance, and Business Insider. She’s an avid credit card points collector and perpetual traveler currently living in Costa Rica.