The impact of having numerous credit cards on your credit record and score is mainly determined by your financial conduct or how prudently you use your credit cards. Whatever number of credit cards you have, you must keep your credit balances low and pay your credit card bills on time.
Although having numerous credit cards is unlikely to harm your credit score, you must never ask for too many credit card accounts at once. Too many new credit cards applied for at once can result in too many hard inquiries, which will have a short-term negative influence on your credit score.
However, if you correctly handle your cards, you may boost your credit limit and enhance your credit scores by having additional credit cards. Continue reading to learn how the number of credit cards you have might affect your credit score and how to determine how many you should have.
How might too many credit cards hurt your credit score?
It might be alluring to have more credit available. It might lead to overspending, which can increase debt. Before applying for a credit card or loan, you go for an online credit score check. Overspending may readily occur if cardholders do not exercise caution. Let’s have a look at some key points:
Managing many timelines may be difficult
To maintain a good credit score, you must pay all your credit card payments on time. Payments made on time enhance your credit score, but they also help you avoid late charges and penalty interest rates. Various due dates might be challenging to manage when you have multiple credit cards.
Many card issuers enable you to adjust the due date of your payment online or in-app, allowing you to choose a date that truly works for you. Depending on when you are paying, you may opt to stretch them out throughout the month, or you can schedule them for the same day, so you don’t have to keep track of various dates.
You may guarantee that pay on time by setting up autopay for at least the minimum amount required and adjusting the date that your payments are due.
Your credit history’s average duration will shorten
The average duration of credit history is used in calculating a person’s credit score, rather than only the oldest account. As a result, each new credit card reduces your credit history’s average duration. While opening new credit cards may drop your credit score by around five points, it usually recovers within a few months.
However, if you open new cards regularly, the negative impact might accumulate. You should also prioritize maintaining access to your first credit card since this will bring your whole credit history up to a longer average duration. Your oldest card may go inactive if you do not use it regularly.
The most straightforward solution to this problem is always keeping your account active by authorizing a small recurrent charge on your credit card and enabling autopay.
Credit inquiries will arise as a result
An inquiry on your credit history is often made when you resubmit your credit card application, and this inquiry will show on your credit report as a result of the query. Whether accepted or refused, these queries may damage your credit score, and they stay on your credit record for two years.
Consider using previously approved or preapproved offers to reduce the effect of many credit card applications. Most major credit card issuers allow you to verify your eligibility chances using soft queries, which have no impact on your credit score. An inquiry will show on your credit record if you make an official application.
How many credit cards are enough?
No one can say how many credit cards you should have. Instead of counting the number of credit cards you have, concentrate on their usefulness and advantages. Consider the following factors when applying for a new credit card: advantages, annual fees, credit limit, etc. Your credit scores will remain solid regardless of the number of credit cards you possess as long as you maintain your credit usage ratio low and pay your payments on time.
Final thoughts
It is not recommended to carry more than two credit cards at any one time. Don’t apply for a new credit card without doing some research beforehand. You may get a copy of your credit report and score for free. But you can also go for loans without CIBIL.
