When you apply for a new credit card, a lender will request a copy of your credit report from one or more of the nationwide consumer reporting agencies (Equifax, TransUnion and Experian) as part of the application. But that doesn't mean you should apply for more credit than you can reasonably use. It's true that keeping multiple credit cards can sometimes benefit your credit scores. How often should you apply for a credit card? Keep an eye on your spending habits and find ways to organize your finances. Plus, keeping track of multiple credit cards - all with different interest rates, due dates, minimum payments and other fees - can become overwhelming.Īdditionally, charge offs, late payments and high credit utilization rates can create negative marks on your credit reports if you are not careful.īefore opening a new credit card account, be sure that you're ready for the additional financial responsibility. The biggest risk is that you can easily spend more in credit than you're able to repay in cash. Issues with having multiple credit cardsĭespite the potential benefits, owning multiple credit cards is not without its downsides. It's also a good idea to pay off your credit card balances in full each month instead of only making the minimum payment. Be sure to monitor how much you spend on each credit card and the payment due dates so that you don't go into credit card debt, pay high interest rates or get charged fees for missing a payment. However, the most important thing to do with multiple credit cards is to keep up with what you owe. If your rate is already at or above 30 percent, opening a new card could improve your credit scores by lowering your credit utilization rate. That means you'll be able to spend more before hitting that 30 percent credit utilization rate. When you open a new credit card, you increase the total credit available to you. A rate higher than 30 percent may negatively affect your credit scores. Lenders usually like to see a credit utilization rate below 30 percent. Your credit utilization rate is the amount of credit you use compared to the total credit available to you. Having multiple credit cards can indirectly impact your credit scores by lowering your debt to credit ratio-also known as your credit utilization rate. How multiple credit cards affect your credit score These might include cashback options for certain purchases, travel benefits or other types of rewards. Many credit cards also offer borrowers access to special rewards programs. Keeping up with multiple credit accounts suggests to lenders that you understand how credit works and know how to manage the amounts you borrow. Lenders and creditors like to see a wide variety of credit types on your credit report. This combination may help you improve your credit mix. If your goal is to get or maintain a good credit score, two to three credit card accounts, in addition to other types of credit, are generally recommended. Two factors that contribute to your credit score are the number and type of credit accounts. Having multiple credit cards, along with other types of credit, can be a good thing, as long as you use each one responsibly. Is it good to have multiple credit cards? Be sure that you can keep up with your existing monthly payments before considering a new credit card. Just remember: The number of credit cards you own is less important than how you use them. However, it's generally a good idea to have two or three active credit card accounts, in addition to other types of credit such as student loans, an auto loan or a mortgage. There's not a one-size-fits-all solution for the number of credit cards a person should own. Missing payments can result in fees and lowered credit scores. If you have more than three credit cards, it may be hard to keep track of monthly payments.
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