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The Pros and Cons of Multiple Credit Cards


Is having multiple credit cards a sign of financial savvy or impending financial doom? That’s a tough one to answer, since there are pros and cons to toting more than one card. Let’s review:

Find out now: Which credit card is best for me?

Pro 1: Multiple Rewards

One obvious benefit of carrying multiple credit cards is that you can take advantage of various rewards schemes. You can use the card that gives the best grocery rewards at the grocery store and use the travel rewards card to buy airline tickets. Real credit card pros know how to game the system to get the most out of having more than one card.

Pro 2: Back-Up

If one of your credit cards becomes compromised or is declined, having another card on hand gives you back-up and peace of mind. Traveling abroad? Having another credit card can be a vacation-saver. Bonus points if one of your cards has no foreign transaction fees.

Related: Credit Cards with 0% Balance Transfer Promotions

Pro 3: Fraud Protection

Having one card that you use for absolutely everything leaves you more vulnerable to fraud. The higher your purchase volume with any one card, the more opportunities there are for the card to be hacked. And if your card is compromised, you’ll be without plastic while you wait for a replacement to arrive. Having multiple cards spreads the risk.

Find out about rewards credit cards.

Con 1: Confusion

The more cards you have, the more complicated your financial life becomes. You’ll have to keep up with more bills, remember to pay them on time and remember to keep your credit utilization ratio below 30% if you want a high credit score. If you’re busy, stressed or just plain scatterbrained, having more than one credit card might not be the best choice.

Con 2: Debt Risk

If you’re prone to overspending or already struggling with credit card debt, having more than one card is risky. So, if there’s a chance you’ll see each card as an opportunity to spend beyond your means, stick with a single credit card.

Con 3: Credit Score Risk

Opening multiple lines of credit in quick succession will cause your credit score to drop. In the long run, having a few high-limit cards that you use sparingly but consistently, paying your bills in full, is great for your credit. In the short term, though, applying for multiple cards makes the credit bureaus think you’re desperate to take on more debt.

Related Article: Avoiding Credit Cards: What’s the Cost?

Bottom Line

Only you know how adeptly you manage your bills. If you’re a personal finance ace, maximizing the rewards from multiple credit cards could be a no-brainer. If you’re just easing into credit, though, you may want to stick with a single card. And don’t forget to pay your bills!

Update: Have more financial questions? SmartAsset can help. So many people reached out to us looking for tax and long-term financial planning help, we started our own matching service to help you find a financial advisor. The SmartAdvisor matching tool can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

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