Can You Have Too Many Credit Cards?

With some things, it’s easy to tell when you have enough. Once your stomach is full, for example, you know you’ve probably hit the acceptable limit on pizza slices. With other things, however, it’s harder to tell if you have enough — or too many.

For many people, credit cards can fall into that latter category; with literally hundreds of credit cards out there, it can be hard to tell when you’ve hit the cap on how many cards you should have in your wallet. And it can get even harder to know your limit when you keep receiving offers in the mail promising big signup bonuses, low rates, or other tempting perks.

Technically, There Is No Credit Card Cap

Part of what makes it hard to know when you have too many credit cards is that it’s really a personal decision. Technically, there is no legal limit on how many credit card accounts you can have open at once. If you meet the qualifications for a given credit card and can get approved for it, you can have it — regardless of how many other credit cards you’ve already opened.

Each New Card Can Impact Your Credit

Of course, there is a lot of room between “can” and “should,” especially when it comes to your finances. Just because you can open an unlimited number of credit cards doesn’t mean that you should open a new card.

For one thing, opening new credit card accounts can have significant impacts on your credit profile. Each new credit card application you submit — whether you’re approved or not — will result in a hard credit inquiry on your credit, which can ding your credit score through the “new accounts” factor, which is worth up to 10% of your score.

Plus, new credit card accounts will be factored into your average account age, which can be worth up to 15% of your credit score. Each new account will reduce your average account age and potentially decrease your scores.

On the other hand, new credit cards can help improve your utilization rate by increasing your overall available credit — assuming you don’t run up a balance on your new card. Overall, the impact to your credit scores from opening a new card will depend mostly on your credit profile; the older and more diverse your credit is, the less impact you’ll likely see — in either direction — from opening a new card.

Some Issuers Have Card Limits

Although the law doesn’t cap the number of credit cards you have, some credit card issuers will places limits on how many cards you can have from their banks. For example, American Express reportedly limits cardholders to five American Express credit cards at any given time; applications for additional cards are likely to be denied.

Other issuers will set limits on how often you can open new cards. Chase, in particular, is notorious for its 5/24 Rule that means you can’t open a new Chase credit card if you have opened five or more credit card accounts in the past 24 months.

Furthermore, some card issuers will put a cap on how much credit you can be extended. If you already have several cards from a given issuer, for instance, you may not be able to open another card because you’ve reached the limit on how much credit the issuer is willing to offer you.

Only Open Credit Lines You Can Handle Responsibly

At the end of the day, the primary barometer for whether you have too many credit cards will come down to how many credit cards you can handle responsibly at one time. If you have so many credit cards that you can’t keep track of due dates and wind up carrying a balance or making late payments, then you have too many cards.

In general, having at least one credit card account open and in good standing is recommended for good credit. When used responsibly, credit cards can help build a positive payment history, improve your credit mix, and show that you can properly handle a revolving credit line.

That being said, for some folks, the right number of credit cards may actually be zero. If you’re unable to resist the temptation to overspend when you use plastic, then you may be better off avoiding credit cards entirely.

At the other end of the extreme, some cardholders have literally hundreds of credit cards — and they manage to have good credit scores, too. If you can keep track of all your credit card fees, balances, due dates, and other particulars, then the proverbial sky is the limit on how many credit cards is too many.