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How many credit cards should I have?

When it comes to credit cards, there’s no magic number you can have or blanket rules that will suit everyone.

For some people, having one credit card may mean there’s too much temptation to spend, while others may like having several which they can use for different purposes – such as earning rewards points or taking advantage of an interest-free period

What’s most important is how your number of credit cards helps you manage any debt you have and build your credit score.

That said, there are some factors that can help you make the decision about whether or not another credit card is a good idea.

Getting another credit card considerations

1. Credit cards can help build your credit history

If you haven’t borrowed before, it can be difficult for lenders to tell how likely you are to repay debts. This means that having a credit card or loan and meeting your repayments can help build your credit score by proving you’re reliable.

2. It can help to have extra funds on hand

Each credit card will have its own credit limit, which means that you’ll have that money available should you need to spend it. This can give you confidence that if something (costly) happens you’ll be able to handle it. However, if possible, it’s a good idea to build an emergency fund to give you this added security.

Using a credit card also means that under Section 75 of the Consumer Credit Act, for purchases between £100-£30,000, your purchases are protected. If your seller doesn't deliver your goods or goes bankrupt, your card issuer will help you get your money back.

Keep in mind, the more funds you have available the more temptation you may have to spend. It’s important to keep that in mind before applying for any new credit card.

3. You don't want to have too much on hand

When making a decision about whether to accept an application for a credit card or a loan, a lender may look at how much credit you already have available. If you have multiple credit cards, they may look at the limits on all of the credit cards combined rather than just the money you’ve borrowed. If you have multiple credit cards that are unused, this may also raise some questions and potentially impact your credit score.

4. Managing multiple repayments can be tough

If you borrow money on multiple credit cards, you’ll have to make multiple monthly repayments. This isn’t necessarily a bad thing, but it may increase the chance of you forgetting one.

Before taking out a new credit card, think about your current situation. Do you find making repayments time consuming or overwhelming? If so, it may not be a good idea to add another repayment. Or are you comfortable with the way you manage your money? If that’s the case, adding a credit card may not have much of an impact.

Should you get another credit card?

The right answer will depend on your circumstances and also your money habits. Some good questions to ask yourself can be:

  • why do you want the card?

  • what will the benefit be?

  • will it make managing money harder?

  • will you be tempted to spend more?

What if you want to have less cards?

If you already have multiple cards and want to simplify your repayments and potentially save on interest, a balance transfer may suit you. This is where you can apply to transfer multiple balances onto one credit card, giving you a single monthly repayment and a period where you may not be charged any interest on your debt.