How Many Credit Cards Should You Have to Build Your Credit Score?

Written by Banks Editorial Team
3 min. read
Written by Banks Editorial Team
3 min. read

Is there a certain number of credit cards you need to improve your credit score? Are you wondering if you have enough? Or maybe you have way too many credit cards, and they’re dragging your score down? These are all valid questions to ponder if you’re working towards a good or excellent credit score.

This guide explores the impact credit cards have on your score and how multiple credit cards can be both beneficial and risky. You’ll also discover if there’s an optimal number of credit cards you need to meet your credit goals, along with an effective way to build credit without credit cards. 

Build Credit and Savings with Self

Self, also known as Self Lender, offers an easy way to build your credit scores with a credit builder loan and credit card.

How Credit Cards Impact Your Credit Score

Credit cards impact your credit score in a few ways. First, you’ll get a hard inquiry on your credit report when you apply for a credit card, which could drop your score by up to five points. The impact is typically short-term, but several hard inquiries in a brief period could tank your score and cause potential lenders and creditors to view you as a credit risk. 

Your payment history is also affected by credit cards. It accounts for the largest percentage of your FICO credit score, so paying on time is essential. Otherwise, your credit score could take a significant hit if you miss a payment and any of your credit card accounts reach 30 or more days past due. 

Credit utilization, which accounts for the second-largest component of your credit score, is also directly impacted by credit cards. Your credit utilization rate is the percentage of your credit limit that’s currently in use. You should aim to keep it at 30 percent or lower to avoid damaging your credit score. To illustrate, if you have three credit cards with $500 limits, you shouldn’t spend more than $450 on all your cards combined.

Benefits of Multiple Credit Cards

There are some perks of having multiple credit cards: 

  • Your credit utilization could decrease if you stop using certain credit cards or pay the balances in full each month before the due date.
  • You could earn more rewards, including travel points and cash back. 
  • You could take advantage of interest-free promotional offers to make big-ticket purchases or pay off other high-interest credit card debt. (Note: This strategy is only effective if you can repay what you spend before the introductory 0 percent interest period ends).

Risks of Multiple Credit Cards

Unfortunately, carrying several credit cards also comes with drawbacks you should consider: 

  • You may be tempted to make purchases you don’t need or overspend. 
  • You risk accumulating an excessive amount of credit card debt. 
  • You could stretch your budget too thin if the minimum monthly credit card payments are unaffordable. 
  • You could spend several hundred or thousands of dollars in interest if you can only afford to pay the minimum on your credit cards each month. 
  • You could struggle to stay on top of your credit card payments each month.
  • You could spend a fortune on annual fees.

Build Credit and Savings with Self

Self, also known as Self Lender, offers an easy way to build your credit scores with a credit builder loan and credit card.

How Many Credit Cards Is Too Many?

Wondering if you have the right number of credit cards? Or maybe you have far too many open credit card accounts? 

The reality is there is no right or wrong answer to this question, and having a lot of cards doesn’t necessarily equal a negative impact on your credit score. Instead, you should focus on using each of your credit cards wisely to build your credit health and make more than the minimum payments. 

Also, evaluate your financial situation to determine how much credit card debt you can comfortably afford to carry each month. Ideally, this figure is equivalent to the amount you can afford to pay in full each month. 

How Many Credit Cards Should You Have to Build Credit?

You can build credit with a single credit card if you pay on time and keep the balance down. Multiple credit cards can be used to meet the same goal if used responsibly. 

It can be tempting to open a new credit card to have access to more available credit. However, running up the balance means your credit utilization ratio will be higher, and your credit score will take a hit.

Ultimately, it’s not a matter of how many credit cards you have but how they’re managed. And if you plan to open several credit cards, you want to space out your credit card applications to avoid racking up too many hard inquiries in a brief period. 

Other Ways to Help You Build Credit

Credit cards can help you build credit, but they’re not without risk. If you struggle to manage your accounts effectively or tend to overspend, a credit builder loan from Self could be a better option.

Unlike traditional loan products, these loans allow you to build credit while saving money through one of three options:

  • Small Builder: Pay $25 per month for 24 months, and receive $520 at the end of the term.
  • Medium Builder: Pay $35 per month for 24 months, and receive $724 at the end of the term.
  • Large Builder: Pay $48 per month for 12 months, and receive $539 at the end of the term.

Each account also comes with a $9 administrative fee. 

Wondering how credit builder loans from Self work to build credit? Here’s a brief overview of what to expect when you open an account: 

  • Self deposits the loan proceeds in a certificate of deposit.
  • You make the agreed-upon monthly payment over a set term.
  • To build your payment history, Self reports payments to the major credit bureaus – Experian TransUnion and Equifax – each month. 
  • You receive the sum of your payments, minus interest and fees, at the end of the term when your account is paid in full. 

You can check your eligibility for a credit builder loan with Self without impacting your credit score, it’s as easy as providing your email address. It’s fast, free, and there’s no obligation to move forward if you decide a credit builder loan is not a good idea for your financial situation.


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