dcsimg

Ask the expert

Add captcha
Close
Enter the text shown above:

Is there such a thing as too many credit cards?

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook

Having plenty of credit cards won't hurt you, as long as you manage your personal finances perfectly. You'll have to judge whether the extra value you get from carrying so many rewards credit cards outweighs the hassle of keeping track of so many statements and payments.

Contrary to popular belief, most credit scoring algorithms measure how good you are at managing your debt, not necessarily how much debt you can afford to manage. Banks make those judgements on their own, based on the information from your credit profile. For instance, Capital One often tests new customers with lower credit limits, while Chase and American Express usually set the bar a little higher.

Underwriters for major credit card companies look at some key indicators when deciding whether you qualify for a new account:

  • Have you been late on any of your monthly payments over the past few years? While most banks may forgive a single late payment, chronic lateness suggests that you've got too much on your plate. Get your current accounts under control to qualify for today's best credit card offers.
  • Do you keep your accounts active by charging something on them every month? Just using your credit card for something trivial, like a pack of gum, can keep your account from falling into inactive status.
  • Have you maintained a low credit utilization across all of your accounts? Use just a fraction of your overall available credit, ideally don't use more than 10 percent of your total credit limits.

A fat wallet can lead to problems with your credit score, as well. Applying for new credit almost always leads to a temporary drop in your credit score. Likewise, closing out an account can rob your credit score of a few points, but only for a few months. Because your credit score can impact what you pay for insurance policies, home loans, and other personal finance services, avoid responding to credit card deals around the same time you're shopping for a house or for homeowners' coverage.

0 Responses to "Is there such a thing as too many credit cards?"

No Comments

Leave a Comment
 
 
 
About Our Ratings ×

Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of our editors, and not influenced by any remuneration this site may receive from card issuers.

Advertisers in our database are highlighted, and advertisements include an option to apply using links on our site. CardRatings.com may be compensated by companies mentioned on the site when a user's application is accepted or approved by such companies.

How do your cards stack up?

Compare your card starting here

NEXT »

Featured Partner Cards

loading