Is It Bad To Have Too Many Credit Cards? 

Written By Alla Levin
February 10, 2022
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Is It Bad To Have Too Many Credit Cards? 

Credit cards serve as financial tools of security and convenience. They play a huge role when the cardholder does not want to carry solid cash with them or even does not have any cash at hand. 

They are also useful when a person is making purchases that could consume a considerable amount of money. In addition, they help a lot when a person is traveling, especially due to their ability to provide the cardholder with travel-related protections. These protections might include some insurance benefits, stolen or lost card replacement, and fraud coverage. You can also earn rewards through your credit cards.

However, is it safe to have as many credit cards as you want? What should you look at when applying for a credit card? It is important to note that too many credit cards can bring factors that affect your credit score negatively. But are there any other disadvantages of having too many of them?

What to Look At

Different factors can be used to help one identify the best credit cards that best suit their lifestyle. To get started, one should compare credit cards to see things such as interest, rewards, and balance transfers and select the one that meets their requirements.

After that, they can then decide on the number of credit cards that they want to have from different financial institutions. However, you should be very careful as having too many of them comes with several drawbacks, among them;

An Increase in Monthly Paymentsis it bad to have too many credit cards

Each time you are applying for a new credit card, you should be aware that you are complicating your monthly bills. This means that you will be adding another payment to the ones that you already have, and will have to always make sure that you remember its due date.

If you happen to be late in making your monthly payments, you are likely going to have fees accrue from late monthly payments. In case you overstay your grace period, you might even affect your credit score negatively, something that might have an impact on many other financial benefits.

However, even though you can have your credit cards set up with autopay, you still need to remember your upcoming payments and make sure that you have enough money in your bank accounts for the payments if you want to keep off overdraft fees.

Increased Credit Card Debt Risk

Having too many credit cards means that you are going to have access to more credit compared to those people with a few credit cards. However, not every other person is responsible enough to handle this well. 

Most people are often tempted to use the money, some even buying things that they do not need. This is a common mistake when some people have access to more credit.

Even though some people might develop smart habits when it comes to their spending despite the large number of cards that they have, it is easy for most of them to fall into temptations to spend too much money simply because they have access to it at the moment.

Possibility of Paying Increased Annual Feestypes of credit cards

It is always good when you have access to different benefits offered by credit card companies. However, you need to note that these benefits are not always free, they come at some cost. 

Depending on the types of credit cards that you have and the perks that they offer, you will find that most of them charge a certain amount of money every year. Let us assume you have ten credit cards, charging an average of $200 annually. That means you will part with about $2,000 every year, a significant amount of money.

However, if you are getting more value that exceeds that of the credit cards that you have, then the annual fee should not be a worry for you. But paying annual fees for tens of cards can be challenging because you might find yourself paying fees for a card that you used maybe once or did not even use.

It Does Not Improve Your Credit Score

Even though some people argue that having a lot of credit cards is going to affect your credit score negatively, this is not true. However, there are factors associated with too many credit cards that are going to negatively affect your credit score. These factors include;

  • Credit Inquiries: Every time you apply for a new credit card, you trigger a new credit inquiry. Even though some people might think that this does not have any impact on their credit score, having multiple inquiries is going to affect you negatively.
  • Short History on Credit Accounts: You need to be careful about the history of your credit accounts. If you have a short history of your credit accounts, you are going to hurt your credit score. Getting new cards now and then will lower the age of your credit accounts, something that is bad for your credit score.

Even though these two factors might not seem to be major issues, building upon them over time is going to negatively affect your credit score.

Is it bad to have too many credit cards: conclusion

Depending on how careful and organized a person is, it might not be difficult for them to manage a large number of credit cards. However, every person can make mistakes, and, therefore, one should make sure that they are keeping the number of credit cards that are easy for them to manage.

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