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Will Having Multiple Credit Cards Hurt my Credit Score?

The rewards and freedom that come with a credit card are highly enticing. If having one credit card comes with plenty of benefits, it begs the question why not have two? Or even more? But is it a good idea to have multiple credit cards?

Credit cards are a good way to build a credit history, which can help you get approval for loans from the bank. However, a bad track record with your credit cards will make it more difficult to get a loan. Here’s our advice on having multiple credit cards and whether it will hurt your credit score.

Why would you want multiple credit cards?

There are a few reasons that it might be a good idea to have multiple credit cards.

  • Access to new rewards and bonus offers: Each credit card comes with its own rewards system, perks and bonuses. It’s easy to get drawn in by special introductory offers on other cards and find yourself slowly accumulating credit cards.
  • Managing expenses: Having different cards can help you keep track of your spending. You may want to use one card for home expenses, one for travel and one for work. That way it’s easier to know how much each aspect of your life is costing you. It could also come in handy at tax time when you’re looking to make certain deductions.
  • Back up in emergencies: Having an extra card is also very useful in the unlucky circumstance of losing your wallet. You might want to have a spare credit card that you keep at home, so you never get stuck without a way to pay for things.

Drawbacks of having multiple credit cards

While there are plenty of reasons to accumulate credit cards, there are also two sides to every coin. Here are some reasons to hold back on your number of credit cards.

  • More fees: Credit cards sometimes come with hefty annual fees. The more cards you have, the harder it is to make the most of the rewards and bonuses to justify the fees they come with. Not to mention you’ll find yourself paying even more interest if you don’t make repayments within the interest fee period on multiple cards.
  • Hard to keep track: With multiple credit cards, it can become hard to keep track of all of them. Each card has its own dates for payments and interest free periods. Losing track of these days could mean you find yourself missing payments and saddled with more interest charges than you would’ve otherwise had. [link to ‘How to make your credit card work for you, not against you’]
  • Risk of overspending: The more credit cards you have, the more credit you have. This can be both a blessing and a curse. If you are unable to manage your spending, you could end up with far more debt across multiple cards than you would’ve had with just one or two.

How do multiple credit cards affect my credit score?

Credit cards aren’t necessarily good or bad for your credit score. So long as you make timely payments across each card and don’t build up too much debt, your credit score won’t be adversely affected.

That said, the number of credit cards you have proportionate to your income can be a factor influencing your credit score. Because credit cards are a flexible line of credit, lenders have to keep in mind that you could max out all your credit card debt the day after they approve your loan.

If you need help checking your credit report and understanding your credit score, the experts at Compare & Connect can make it easy [link to credit score checking service]. Moreover, if you have decided an extra credit card would be a useful addition to your wallet, we can make it easy to decide which credit card is the best option for you based on the way you spend.

Sally Writes 23 Dec 2020