The Ideal Number of Credit Lines

By Doug Matus

Many consumers rightly care a great deal about the maintenance of a high credit score. In addition to timely payments and low credit utilization ratios, the number of credit lines a person owns has an impact on his or her credit score. 

A few different factors come into play when determining the ideal number of credit cards one should have. 

Of course, when deciding whether to get another credit card, consider your spending habits and ability to manage credit before you make a decision.

The benefits of multiple lines

While payment history and total debt provide the biggest influence on credit scores, credit diversity and utilization serve as secondary factors. Credit mix means that a person has multiple forms of debt and/or loans. 

For example, someone with a home mortgage, student loans, credit cards, and an auto loan would have a very diverse assortment of credit. Credit utilization ratios reflect the total percent of available credit that a person has accessed.

Additional credit cards have relevance for both of these conditions. More credit cards not only diversify your accessible credit, they also lower your credit utilization ratio through an increase in available credit.

How many credit cards should I have?

While multiple credit cards can help your credit score, they can also create a recipe for disaster. Before you apply for additional cards, take a hard look at how you manage your current ones. 

  • Do you make your payments on time? 

  • Do you feel confident that you can manage the availability of additional credit? 

If the answer to either of these is “no,” then the benefit of multiple lines is not worth the risk.

If you feel confident in your spending habits, then additional credit cards can give you the freedom to raise your scores. There is no “magic number,” and any number of additional cards that you can utilize responsibility will lead to improvements. 

Five general use cards — those issued with Discover, MasterCard, Visa, or American Express logos — with $20,000 limits would serve as a good standard to measure yourself against. 

Remember, though, in order to attain the benefits of all those extra cards, make sure to watch your spending, maintain low balances, and make your monthly payments on time. See the effect of late payments on your credit score.

About the Author

Doug Matus is a freelance writer who regularly contributes to Self.

Written on May 14, 2015

Self is a venture-backed startup that helps people build credit and savings.
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Disclaimer: Self is not providing financial advice. The content presented does not reflect the view of the Issuing Banks and is presented for general education and informational purposes only. Please consult with a qualified professional for financial advice.

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