Does Having Too Many Credit Cards Affect Your Credit Score?

Manage Your Credit
Worrying about having too many credit cards is a very common concern and one that someone interested in maintaining a good credit score would ask. However, the answer depends on a wide range of things: your credit history and credit management, credit balances, and several other important factors. Credit cards are very convenient and can be used to boost your credit score over time. Nevertheless, because they're so easy to use, many people overuse them and end up hurting their credit score due to high balances, late payments, and other undesirable factors.

Let's look at some of these factors:

  • High credit card balances
    Whether you have three credit cards or 23, high credit card balances hurt your credit score. The higher your balances, the higher your risk of defaulting is in the eyes of lenders and credit bureaus, so this can hurt your credit score quite a bit.

  • Your debt-to-credit ratio
    This fancy term simply measures the total amount of your current credit card balances against your total available credit. You want to keep this ratio at or below 35 percent of your total available credit or less; ratios of 40 percent or more will begin to do serious harm to your credit score, since higher ratios equal greater risk from the lenders' and credit bureaus' perspectives.

  • Length of credit history
    It isn't your oldest credit card that's most important here. Rather, it's the average age of all your open credit accounts that interests lenders and credit bureaus the most (they're part of your credit history). Having a variety of credit cards that are several years old or older helps your credit score in two ways:
    • More cards add to your total credit limit and help your debt-to-credit ratio.

    • Lenders like predictability, and older credit cards that are in good standing promote confidence in your credit management and help your credit score.
    Remember, however, that constantly applying for new credit cards works against your credit score, because it suggests an urgent need for more money.

  • Late payments
    Your credit score will suffer if you're late making a payment. It won't matter how many credit cards you have or how long you've had them. Making payments on time accounts for 35 percent of your credit score (the biggest part).

Having "too many" credit cards only affects your credit score if you don't handle them properly. Your credit score really depends on your credit history and whether you pay your bills on time. Since your credit score plays such an important factor in your personal and financial life, it's in your best interests to take good care of it. If you keep your balances low, use older credit cards every once in a while to keep them active, and pay your bills on time, your credit cards will work for your credit score rather than against it.


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