Why Having Too Many Credit Cards May Be a Bad Idea

Having a credit card allows you to make purchases when you otherwise don’t have the cash on hand. This can be really useful and having more than one card theoretically means you can charge more money in total.

However, there are some very valid reasons for why you should instead limit the number of cards you have to a smaller number like one or two.

  1. The more cards you have, the more confusing your credit card collection will get. Every card will come with it’s own statement, rules, and APR. Unless you are really organized or good at remembering how you were using each card, it can become a real mess and you can get punished with fees for forgetting certain rules. More credit cards also means more chances for a mistake. It only takes defaulting on one card to suffer a blow to your credit score and APR.
  2. Even if you can charge a lot of stuff onto credit cards, it doesn’t mean you should. If you buy a lot of things today, then you will be paying it off for a long time. As you leave all that money owed on your credit card accounts, you will be accumulating a lot of interest.
  3. Many credit cards have annual fees. If you’re going to use cards that have an annual fee, then you might be able to save money by having only one rather than a bunch. Unless a card does not come with any automatic fees, you don’t gain anything by having the card there and not using it.
  4. Your credit score can suffer when you open up new accounts. Although this is generally temporary, lending agencies may be a little weary when they see that you have a bunch of credit cards active in their reports.
  5. Relying too much on credit cards may hurt you in the end anyway. It’s generally not a wise idea to pretend you have more money than you do by taking out a lot of money on loans. While some purchases simply can’t be made out of a paycheck, if you can pay for more up front or through a debit card then it protects you more from having early decisions bite you later on.