Playing Your Cards

George Diaz

YOU’VE PROBABLY already asked yourself this question: Is it better for my credit score to have just one credit card—or many?

There’s no magic number, because it isn’t really about how many credit cards you have. Rather, what matters is your financial situation and how you handle your cards. For example, if you are just beginning to build a credit history, it’s best to have a single card. Try to follow three rules:

  1. Pay your bills on time—and avoid late payments at all costs.
  2. Keep the balance on your card as low as possible.
  3. Don’t apply for a new credit card until you need it.

If you follow these rules, you will be on track for a good credit score. If you are also paying a student loan, car loan or mortgage on time, you’ll further prove to lenders that you’re a responsible borrower.

This good behavior will appear on your credit report and help raise your credit score. With a single credit card, it’s difficult to establish a robust credit history, so you might eventually request a second card and perhaps more.

Is it possible to have too many cards? For people with high-paying jobs, it’s common to have multiple credit cards. When those cards are used wisely, these folks can end up with a FICO score that’s well over 700 and perhaps above 800. A low score, by contrast, is usually anything below 640.

In other words, you can have many credit cards and not ruin your credit score. Instead, what matters is keeping your balances low in relation to the credit limits you have. This is called the credit utilization ratio. If you charge expenses on several cards, but have a low total balance, you’ll probably earn a high credit score.

To be sure, your score can dip when you request new credit cards. But if you have a long history of regular loan and credit card payments, asking for another card should have little or no impact. Want to see what your credit reports look like today? You can request free copies of your reports from the three major credit bureaus by heading to

George Diaz holds an MBA, is a digital media professional and loves writing. Follow him on Twitter @sobredinero1.

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