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It’s a fact, there are more credit cards available than you can ever stuff into a normal-sized wallet. That begs the question, “How many credit cards can you have before you have too many?” That answer is different for everybody. But, it can be easy to find your perfect number by considering the following.
What Happens When You Apply For a Credit Card?
In regards to how many credit cards can you have, there are several factors to consider. Regardless of the bank, each credit card application has a temporary negative impact on your credit score. This is because the issuer performs a hard credit inquiry that stays on your credit report for two years. Even if they decline your credit application, the inquiry stays on your credit report.
If your card application is approved, you’re the proud owner of a new credit card. But, you also receive a negative mark on your credit report for these credit score factors:
- Credit Age
- Payment History
- Total Open Accounts
Your score will quickly rebound when you make on-time payments on each new card. But, it can take between three and six months to see your score recover.
If you apply for multiple credit cards within a few weeks from each other, your subsequent applications might be rejected. A general rule of thumb is to wait three to six months between credit card applications to improve your approval odds.
Some Banks Also Restrict Credit Card Applications
To limit credit card churning, some banks automatically decline your credit card application if you apply for too many cards too soon. Two of the most restrictive banks are Chase and Bank of America.
Chase 5/24 Rule
One of the most well-known rules is the Chase 5/24 Rule. If you apply for five credit cards (or listed as an authorized user) in 24 months, your additional applications are declined. It doesn’t matter what bank issues the card or if your application for all five cards were approved.
This rule applies to select Chase credit cards including the Sapphire, Freedom, and Ink Business. It also applies to several co-brand travel rewards cards.
If you want to apply for a Chase credit card subject to the Chase 5/24 rule, you have to wait until you only have four applications within the rolling 24 hour period. Before you apply, it’s a good idea to check your credit inquiries first.
Bank of America 2/3/4 Rule
The Bank of America also has 2/3/4 rule that limits how many B of A credit cards you can apply for in a 24-month period.
With the 2/3/4 rule, you can have no more than 2, 3, or 4 Bank of America cards as described below:
- Two Bank of America cards in two months
- Three Bank of America cards in one year
- Four Bank of America cards in two years
Under this rule, your applications for non-B of A cards shouldn’t affect your approval odds for Bank of America credit card applications.
Do You Have Too Many Credit Cards?
Some people will be happy with one credit card. Others might want as many as ten credit cards. But how many credit cards can you have realistically? There are several factors that help you decide if you have too many credit cards.
Maximize Each Credit Card Signup Bonus
Besides waiting up to six months between credit card applications for higher approval odds, signup bonuses can be another reason to spread out your credit card applications.
Many credit cards offer signup bonuses to entice new cardholders. If you don’t earn the bonus, you lose out on some valuable benefits.
Some bonuses can require you to spend up to $5,000 in the first three months. Once you reach this spending target, you can begin thinking about your next card application. Of course, make sure you can meet the spending requirements for the next signup bonus before you apply.
Watch Out For Signup Bonus Restrictions
Just like some banks automatically reject your application if you have too many recent applications, they can also disqualify you from the signup bonus, even though your card application is approved.
In the past, existing cardholders could cancel their card, wait 24 months, and apply again to earn the current bonus offer a second time.
Today, each bank has a slightly different policy and you need to read the fine print before you apply. Although the “cancel and wait 24 months trick” still works, it usually doesn’t apply to some of the best travel rewards credit cards.
Here’s a quick summary of some of the different signup bonus policies:
- American Express: One welcome offer per lifetime per card (i.e. you only earn the Amex Platinum bonus once)
- Chase: Cannot receive a new bonus if you own another card in the same family in the most recent 48 months. Right now, this applies to the Sapphire and Southwest Rapid Rewards credit cards
- Citi: One bonus per card family when you haven’t been an existing user in 24 months
Is the Annual Fee Worth the Benefits?
Annuals fees should make you think twice if you should apply or keep a credit card. If the benefits outvalue the annual fee, you should avoid that card. To save money, you might cancel your card too. Although you take a temporary hit to your credit score, you save money.
One time where it pays to keep an annual fee credit card for the benefits are hotel credit cards with free nights. The free anniversary night is usually worth more than the annual fee.
Can You Keep Every Card Active?
As your credit score improves and you qualify for the best rewards credit cards, you soon find yourself not using your first credit cards. This is because the purchases rewards and card benefits usually aren’t as good. You should still continue to own these old accounts to lengthen your average credit history length. You also avoid an unnecessary drop in your credit score.
To keep your unused credit card from getting canceled, make a purchase at least once every six months. Just make sure you don’t forget to pay the balance in full before the due date. Since you probably don’t monitor these accounts, you might overlook the statement balance notification when it arrives in your inbox as junk email.
Just make sure you don’t miss the monthly payment on any of your credit cards.
Summary: How Many Credit Cards Can You Have
There isn’t an absolute number of how many credit cards can you have. Several variables that affect this include your current credit score, what’s already in your wallet, and the credit card issuer’s application and signup bonus policy for any future cards you want. Of course, you should only own as many credit cards as you can responsibly manage.
Perhaps instead of ‘how many credit cards can you have’, it should be ‘how many credit cards can you manage?’
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