I know having a bunch of credit cards isn’t the wisest but I have an amazing credit score and curious if that changes anything

Having more than a handful of credit cards in your wallet may make managing them a bit more challenging. Not to mention that it can be easy to forget to pay off a certain bill at the end of the month. Either way, having a number of credit cards isn’t necessarily a terrible thing in itself, provided one knows how to stay on top of each one of them (automated payments). In fact, some credit card “churners” or “hackers” have numerous cards to help them optimize spending and maximize their returns (points for trips, cash back, or attractive promo offers).

Given that many of us are bombarded by offers to sign up for a new, shiny credit card, it can certainly be difficult to resist bringing on a few more cards. And while there’s no hard “limit” on the number of credit cards that one can have, I do think the right answer varies from person to person. Let’s check in on factors that consumers should consider before signing on for yet another card.

How many credit cards is “too much?”

There’s no one-size-fits-all answer to this question. If you’re a seasoned credit card hacker, you could probably handle a double-digit number of active credit cards. For others, who value simplicity, just one or two credit cards are good enough to get the job done.

In any case, the real question one should ask is how many credit cards would be considered “too much” for one person. In my view, if an individual’s credit score is under pressure because of the number of cards they’ve signed for of late, or if there’s trouble keeping up with the monthly statements, they have probably exceeded their limit. Also, if one pays annual (or monthly) fees for too many cards that aren’t being put to good use, that’s another sign that one or more cards may need to be cancelled.

In short, if your wallet is bursting with credit cards and it’s costing you (either in the form of fees, credit points, or you’re more inclined to spend more on discretionary items), you’ve probably bitten off more cards than you can chew. However, if there’s really no negative effect, you’re probably fine, even if you’ve got more cards in your wallet than the average American (that number is around four).

This Reddit user has an “amazing” credit score and isn’t looking to spend more. What’s the right number of credit cards for them?

Signing up for numerous cards all at one time could hurt one’s credit score, given that it’ll decrease the credit age of one’s average accounts. On the flip side, though, more credit cards under your name means you’ll have a higher credit limit. And assuming you don’t spend more, your average credit utilization (the percent of the credit limit that you’ve used up) will be lower, and that bodes well for building credit.

In short, loading up on credit cards could have a negative impact in the short term but a more uplifting effect in the long term if one’s spending pattern stays (mostly) the same.

For our Reddit user, who already has a stellar credit score, it may not make sense to start paring cards just yet unless, of course, they have underutilized cards that charge an annual fee. In that case, it may be worth cancelling some cards gradually to lessen the blow to one’s credit score.

At the end of the day, I think it’s far better to save actual money than credit points, especially if one’s credit is already above and beyond what’s considered “good.” Having good credit is incredibly important, but there are diminishing returns when it comes to shooting for a perfect or near-perfect credit score compared to those who already have great credit.

In any case, I think this Reddit user is comfortably within their limit. Given they’re taking advantage of most of their cards, it seems like they’re a card churner without knowing it. 

The post I know having a bunch of credit cards isn’t the wisest but I have an amazing credit score and curious if that changes anything appeared first on 24/7 Wall St..