How many credit cards should I have?

It’s a good question. And, like most good questions, it doesn’t have just one good answer. It depends on your situation and your goals. For some people, one credit card is too many. Others juggle 20 credit cards or more systematically and effectively. According to a recent survey, the average American consumer has 3.1 credit cards (not sure what you can buy with .1 of a credit card, but doubtless you’ll find something if you shop long enough).

While there isn’t a magic number of cards that you should have, it’s a good idea to have at least one card if you’re trying to build credit. In general, most credit experts recommend having 2-3 credit cards in order to have enough credit for emergencies, stabilize your credit, and keep your utilization low.

How to use a credit card responsibly: 3 Credit Scenarios

The best way to determine how many credit cards you should have is to analyze your credit profile and spending patterns. Let’s look at a few different categories of credit card holders and some guidelines for how many cards make sense for each group.

1. You’re new to the credit world or recovering from a bad credit incident

In this situation, you are wise to start with just one card. If you are climbing out of a bankruptcy or other major financial setback, it might even need to be a secured credit card — a card that is backed by collateral that you deposit. Use it a little bit each month and be sure to pay it off completely at the end of the month. This will help to establish you (or re-establish you) as a reliable credit risk and will boost your utilization ratio. As long as you are buying things you need to buy anyway, and paying off the card faithfully, it won’t cost you any more than you would have paid otherwise. Using credit this way will pave the way to an improved credit score. Be careful though. Accumulated debt can come with hefty interest rates, and missed payments can put you in a deeper hole than you started from since your payment history is the largest single factor that impacts your credit score. It takes discipline to successfully manage any credit card, but it can be valuable to you in the long run.

2. You do a lot of traveling

Carrying lots of cash when traveling can be impractical and even dangerous. If you are traveling internationally, having to convert currency can also be a challenge. Credit cards are a prudent solution, but you will want to have several connected to different networks. For instance, try to carry one card from each of the major providers: Visa, MasterCard, and American Express. You never know when you might encounter a merchant who doesn’t accept your card, or when you may experience a glitch. Especially if you are traveling to a remote place, you might be glad to have an old-school card with embossed numbers on it. There are still certain corners of the world that manually run cards to make a carbon copy impression. (If you are under 30 and that last sentence made no sense, ask your parents).

Another reason credit cards can be valuable to travelers is that many offer reward points toward flights, or hotels — making your travel more affordable. Some may also offer perks such as upgrades on your seating section or access to exclusive airport lounges. (If you are stuck in an airport for an extended period for a weather delayed flight the right beverage in the right setting can make or break your whole trip.)

3. You have strong credit and know the rewards that best suit you

Having multiple credit cards does not negatively affect your credit score — if you are able to consistently pay off the balances and keep your credit utilization under 30%. So, for some people, having multiple cards is worth it for the borrowing power and the rewards. There are myriad options here. Cash back bonuses, airline miles, hotel discounts, trip insurance, and other enticements. All of these perks can be great deals, but only if you are paying off the full balance each month. Even if you are “earning” 5% cash back (which would be high), if you are carrying a balance with an interest rate of 12% (which would be low — many cards are over 20%), then you are paying considerably more in interest than you are getting in rewards. Also, as a general rule, the more rewards and perks there are, the higher your annual fee. So, if you can be a savvy consumer and utilize these types of cards, there can be genuine value. But it is on you to be clear about the advantages you are accruing and make sure they are really worth it. If it is too complicated to keep up with, then you are probably better served by scaling back to just a couple of credit cards. In short, the number of credit cards you should carry is the number you can successfully manage to your advantage.

Spero is proud to offer an excellent credit card to our members. It features:

• No Annual Fee.
• No Cash Advance Fee. If you need some cash from your available credit line, we won’t charge you a fee for the advance. Plus, your interest rate will remain the same.
• No Balance Transfer Fee. We allow you to transfer your balances from other credit cards without incurring a fee for the transfer.
• 25-Day Grace Period. With a 25-day grace period, you have 25 days from the date of your statement to have your bill paid.
• Easy Payment Options. Payments are accepted through the mail and at your local branch.

Stop by today, or apply online. We want you to use the credit you deserve while saving the money you’ve earned.