Rewards credit cards offer benefits tailored to different spending habits. Each boasts unique perks so enticing that you’ll fill out an application before reading the fine print. From the travel perks to cashback, the options seem endless.

So, in this sea of plastic, how many credit cards should you really have? The answer isn’t one-size-fits-all. It largely depends on your spending habits, financial goals, and ability to manage multiple accounts responsibly. Here are a few considerations to help guide your decision.

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How Many Credit Cards Should You Have?
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1. Diversify for Maximum Benefits

Having a mix of cards allows you to maximize rewards across different categories. For instance, using: 

  • The Chase Sapphire Preferred for travel and dining.
  • The Capital One Quicksilver for everyday purchases 
  • The Walmart credit card for groceries, optimizing your rewards and savings.
  • The Wells Fargo Active Cash card for 2% cash back on all purchases.

Then, there are the more specialized cards, like the Southwest credit card, if you’re frequently flying with the carrier. 

2. Keep an Eye on Your Credit Score

More cards mean more responsibility. Each application can temporarily ding your credit score, and managing multiple due dates increases the risk of a missed payment. Regularly check your credit report (you can get a free credit report from sources like Experian) to ensure your credit utilization and payment history are in good shape.

3. Beware of Overextending

While collecting cards for every possible scenario is tempting, it’s crucial to avoid overextending yourself. Every card you add complicates your financial management and increases the temptation to spend beyond your means.

4. The Magic Number

So, is there a magic number? Not exactly. For some, a couple of cards are all they need to manage their finances effectively and reap rewards. For others, a carefully curated collection of five or six cards maximizes benefits across various spending categories without becoming unmanageable.

An Example of a Great Credit Card Strategy

John uses a Walmart credit card that offers a high cashback rate on grocery purchases at the superstore. He uses this card exclusively for grocery shopping to maximize rewards in this category. For dining out, John has a Chase Sapphire Preferred to earn extra points per dollar spent on dining at restaurants, including cafes, fine dining establishments, and even fast food outlets.

John uses his Wells Fargo Active Cash card for unlimited 2% cash rewards on purchases for recurring expenses like streaming services, internet, and cell phone bills. This flat rate applies to all spending without navigating varying bonus categories or signing up for quarterly promotions.

Why this strategy works:

  • Maximized Rewards: By using different cards for different spending categories, John maximizes the cash back or points he earns on his everyday spending.
  • Improved Cash Flow: Automating bill payments with a credit card ensures bills are paid on time, avoiding late fees and improving his credit score over time.
  • Strategic Credit Use: This approach can help build a positive credit history when balances are paid off in full each month, demonstrating responsible credit use and management across multiple accounts.

In conclusion, the “right” number of credit cards varies from person to person. It’s about finding the balance that works for you, where you can enjoy the benefits of each card without letting them become a burden.

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