How many credit cards should you ideally have?

How many credit cards should you ideally have?

How many is too many when it comes to holding credit cards? Credit cards are dime a dozen. Should you own three or five of them? Unfortunately, there is no one-size-fit-all answer to your question. 

A) Important factors

However, considering the following factors can help you gravitate towards a figure that befits you. 

Rewards and bonuses

Many credit card companies are giving sign-up bonuses in the form of cash back or rewards. In addition, there are regular reward programs for spending. Such rewards pay-off over the long-term, if you use it to make your regular household expenses. 

Also, it is better to redeem reward points as cash back than as a gift, since the latter leaves you with limited choices and also a poor bang for the buck.

Fees and print

While some cards are life-time free, others aren’t. Some have zero annual fees only if you spend a certain amount (say Rs 4-5 lakh annually). So, be aware of these charges and the fine print. 

Credit score

Credit score matters when you do any kind of borrowing – be it for buying a house or a car. Higher the credit score, lower are the interest rates. 

Holding more credit cards, interestingly, can further improve your score. How is that so? That’s because credit bureaus that assign credit scores to individuals take into consideration your credit utilization ratio – calculated by dividing total credit card balances by total card limits. Keeping the credit utilization ratio below 30%, helps keep the score high. In that sense, holding multiple cards can lower credit utilization ratio and improve score. 

Also don’t close an old credit card, especially if you have paid bills on time. It could otherwise reduce your credit history and impact your credit score.

Payment discipline

Credit card ownership is justified if you are able to aptly match your inflows with outflows. Otherwise, it can lead you towards a debt trap. The financial cost for delayed payment or a credit rolling-over is very high. So, refrain from using a credit card if you are still fixing your financial problems. 

B) Making the right choices

Once you are aware of the pros and cons of owning a credit card, you need to make the right choices. 

Choosing cards

Choose a primary card that offers a flat benefit as cash back on all purchases. Some cards focus on rewarding customers for travel, while others are for online purchases or that of apparel. Based on one’s lifestyle, one should choose a card. 

Also, don’t be in a hurry while applying for credit cards.  Applying for multiple cards in a short span of time could otherwise lower your credit score. 


Moreover, ensure you have cards that are accepted at most retail networks. Mastercard or Visa is accepted at most outlets in India as against that of American express. So, if you own two credit cards, ensure you diversify it across different networks. It could prove to be a good back-up in case of an operational or technical glitch related to card, machine or payment gateway.

The ideal number

If you don’t have a credit card yet, it is advisable to have one. It helps build a credit history. Once you start proving your history and are comfortable with the process, you can consider owning more. 

Having more than one credit can work in your favour, if you pay things on time and are adroit at managing multiple cards. For one, you can benefit from different reward programs.  It also helps if one gets lost, as the process of new card issuance takes a while. If you own a business, you can have two separate credit cards to bifurcate your personal and business expenses. 

You can own three of them, if you want to leverage on more rewards. However, anything beyond three is not worth it. 


Go for a credit card, if you are adept at managing your finances. Owning more than one can help you leverage on different reward programs and also bifurcate expenses. However, managing more than three can get cumbersome. 

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