How Many Credit Cards Should I Have To Build Credit?

How Many Credit Cards Should I Have To Build Credit?

How many credit cards should I have to build credit? The answer is not the same for everyone. In order to find out how many credit cards you should have to build credit you need to look at your finances which includes your budget, debt, bills and your credit score.

Is there such a thing as having too many credit cards? Do you not have enough credit cards? To find out how many credit cards you should have read more below.

This article will tell you how many credit cards you should have based on your credit score and how you can improve your credit.

How Many Credit Cards Should I Have To Improve My Credit Score?

How many credit cards should I have to improve my credit score? - The Credit Repair Blueprint

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Ideally, you should strive to have six credit cards to improve your credit score. Why should you have six credit cards? First, let’s break down what makes up your credit score. The FICO score is the most popular credit score used among lenders and they calculate your credit score as follows:

  • History of Payment – 35% of your FICO Score
  • The Amount Owed (Debt) -30% of your FICO Score
  • Length of Credit History – 15% of your FICO Score
  • Credit Mix – 10% of your FICO Score
  • New Credit – 10% of your FICO score

Related: All You Need To Know About The FICO Score

Know that we know what makes up our FICO score we can explain why having six credit cards is the ideal number of credit cards you should have. History of payment and amount owned make up 65% of your credit score so if you make all of your payments on time and pay off your credit cards, or have less than 10% credit utilization you can greatly improve your credit score.

The best rule of having a credit card is to pay off your card in full each month. That shows the credit card company that you are using the credit they gave you and by paying it off each month it shows them that you are responsible with your money and they will want to offer you more credit cards.

Related: How To Pay Down Your Credit Cards

Once you prove to credit card companies that you can pay on time and keep your debt low they will start offering you better credit card features such as no interest credit cards, increased credit limits, and rewards credit cards.

Do Too Many Credit Cards Hurt Your Credit?

The only way having too many credit cards can hurt your credit is if you do any of these 3 things.

  • Too Much Debt – If you max out your credit cards and don’t pay them off it can hurt your credit. If you do that with each credit card you have that will really hurt your credit score.
  • Don’t Pay On Time – If you have any late payments or missed payments that can hurt your credit score significantly. Learn what happens when you don’t pay your credit card bill
  • Too Many Inquiries – When you open too many credit cards at a time or apply for loans that can hurt your credit.

As long as you keep your credit utilization low, pay on time, and only open one to two credit cards every six months, having multiple credit cards will not hurt your credit. If any of the three things mentioned above describes your credit card situation, you should consider fixing your credit now before you get into too much credit card debt and can’t open up any new credit cards, apply for loans, and end up in collections.

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Is 3 Credit Cards Too Many?

No, 3 credit cards are not too many. According to the Experian Consumer Credit Report, the average American has 4 credit cards. The more credit cards you have the more credit you have to use which will improve your credit score.

Best Credit Cards To Build Credit For Every Credit Score Level

If you struggle with having too many credit cards but want to build your credit you should consider one of these credit cards. Each of these credit cards can be used for different levels of your credit score. So if you have bad credit, you should start with a credit builder credit card and work your way up.

Best Credit Card for Bad Credit (580 or below)

Self Visa Builder Credit

The Self Visa Credit Card is the best option to start building your credit if you have no credit score at all or if you have bad credit. First, you need to apply for a credit builder loan which once you make 3 monthly payments on time (which will increase your credit score) you can than apply for the credit card.

Best Credit Card for Bad Credit Self Credit Builder Credit Card
  • No minimum credit score needed to apply
  • You first need to have an open credit-builder account
  • Make 3 monthly payments on-time
  • Have $100 or more in savings
  • Have your account in good standing
  • Choose your credit limit
  • Monitor and spending activity and always pay on time in full

Related: Best Credit Cards for Bad Credit

Best Credit Card for Fair Credit (580-669)

Discover It Secured

Having a fair credit score is a step up from a bad credit score but the credit cards you can apply for are still limited. It’s best to play it safe and apply for a credit card that you will get approved for and has great benefits that will help you improve your credit score.

Discover It Secured is in fact a secured credit card that you can get if you have bad credit. This credit card allows you to decide the credit limit you would like while also earning you cash back rewards. It also reports your on time monthly payments to the three credit bureaus to improve your credit score. Once you have been in good standing for 8 months you can apply for a credit card that doesn’t require a security deposit like the Discover It Cash Back Credit Card.

Best Credit Card For Fair Credit - Discover It Secured
  • No Annual Fee
  • Low Credit Score (300-600)
  • APR 22.99% 
  • Earn 2% cash back at gas stations and restaurants on up to $1,000 in purchases each quarter. 
  • Earn 1% cash back on all other purchases. 
  • Automatically match all the cash back you earn at the end of your first year. There is no limit!
  • Reports monthly to all 3 major credit bureaus. 
  • Monthly reviews starting at 8 months to see if they can transition you to an account with no security deposit

Best Credit Card for Good Credit (670-739)

Chase Freedom Unlimited

The Chase Freedom Unlimited credit card has everything you would want in a good credit card. It has a $200 sign up bonus, earn 5% on travel, 3% on dining and drugstores, no interest for 15 months and no annual fees.

Chase Freedom Unlimited Rewards Credit Card
  • $200 bonus after you spend $500 on purchases within the first 3 months.
  • Earn 5% on travel purchased through chase Ultimate Rewards.
  • Earn 3% on dining at restaurants, including takeout and eligible delivery services like Doordash.
  • Earn 3% on drugstore purchases.
  • Earn 1.5% on all other purchases 
  • Cashback rewards do not expire.
  • 0% APR for 15 months 
  • No annual fees

Related: Best 0% Interest Credit Cards

Best Credit Card for Excellent Credit (740-850)

Chase Sapphire Reserve

The Chase Sapphire Reserve is one of the best cards to get if you have excellent credit. It has a great sign-up bonus of 60,000 points, excellent travel incentives, and 3X the points when you go out to eat or order in. It has 16.99% – 23.99% APR and it does have an annual fee of $550, and $75 for each authorized user.

Best Credit Card for Excellent Credit Chase Sapphire Reserve
  • Earn 60,000 bonus points when you spend $4,000 on purchases in the first 3 months of opening an account (That’s $900 toward travel when redeeming through Chase Ultimate Rewards)
  • $300 annual travel credit
  • 3X points on dining at restaurants worldwide including delivery services, takeout, and dining out.
  • Earn 1 point per dollar spent on all other purchases
  • Plus you get travel and purchase coverage, partner benefits such as Lyft, Peloton and DoorDash, Global Entry and TSA Pre, Complimentary Airport lounges, and complimentary luxury hotel and resort room upgrades.

Related: How To Waive Annual Fees On Credit Cards

4 Tips To Manage Your Credit Cards

When you have multiple credit cards, you need to learn the best ways to manage them so you don’t forget payments or spend more than what you are able to afford. Here is our 4 tips to manage your credit cards:

  • Automatic Payments – Mostly every card includes an easy-to-use app that you can download and manage your credit card accounts. Log in to each credit card account and set up automatic payments so you never have to worry about missing any payments.
  • Create A Budget – You need to know what your income is and what you are spending on bills, so creating a budget with Quicken can help you manage your bills so you know exactly where your money is going. You can also lower your bills and cancel subscriptions with BillShark.
  • Pay Off Your Debt – As we mentioned above, having the least amount of debt can help improve your credit score and make managing your credit cards easier. If you have a lot of debt across multiple credit cards you can use Payoff to help you manage your debt with one simple monthly payment.
  • Monitor Your Credit Score – Keep an eye on your credit score to see what areas of your credit need improvement or what areas you are doing well in. Most credit monitoring apps such as MyFICO, Credit Karma, and Credit Sesame will give you recommendations on new credit cards that can help you increase your credit score.

Related: 5 Best Credit Score Apps

Do you have bad credit, no credit, or want to learn how to become a credit expert?

Check out our credit repair training and learn:

  • What your actual credit score is
  • How to get a copy of your free credit report
  • How to get your credit back on track today
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