Our Guide to Credit Cards

If you're like most Americans, you typically reach for your credit card at the cash register. According to the Bureau of Consumer Financial Protection, an estimated 70% of adults in the United States had a credit card account in their name in 2020.

However, one credit card isn't sufficient for some consumers. For various reasons, it's become increasingly common to have more than one card in your wallet. Holding more than one credit card can help improve your financial health.

So, how many credit cards should you have? In our guide to credit cards, we'll explain the benefits of having two credit cards and how many credit cards is too many for there to be any benefit. 

*Disclaimer: Ethos' content is intended to provide general education about having multiple credit cards. You should consult a financial planning professional if you have questions about opening a new credit card account.

Should I have multiple credit cards?

If you're wondering if you should have multiple credit cards, the answer isn't a simple yes or no. Ultimately, it all comes down to your financial goals and your current financial situation.

Having more than one credit card does have its advantages. It can improve your credit, increase your credit limit, and give you access to more points and perks, like airline miles. However, you should only have two credit cards if you spend responsibly and pay them off every month.

If you currently have credit card debt or you're just scraping by financially, opening a second credit card could put you at greater risk of financial hardship.

Having more than one credit card makes it easier to overspend (and not to mention, you have multiple payments to manage). Missing payments — even simply forgetting the due date — can significantly impact your credit score.

How many credit cards is too many?

There's no hard-and-fast rule as to how many credit cards is too many.

Currently, there's no limit to the number of credit cards one person can hold. If you want to open 20 credit cards, nothing is stopping you, as long as you're approved for each one and you can afford to pay off your balance in full at the end of each billing cycle.

Having more than one credit card is ideal if you're in an excellent financial position. Too few credit cards can make it more difficult for credit bureaus to give you a credit score. When you have multiple credit cards and demonstrate responsible spending habits, you're more likely to have a good credit score.

However, one thing to note about multiple credit cards is that applying for more than one account at once is typically not a good strategy. Submitting various credit card applications within the same week or month can negatively impact your credit score, which may jeopardize your chances of getting approved. 

If you want to get another credit card, it's best to wait at least six months between applications. That way, your credit score can rebound back to where it was previously. 

What kind of credit card should I get?

The right credit card is different for everyone. However, if you're interested in opening a second (or third, or fourth) card, consider looking at one with perks that you don't already have.

For example, let's say you currently have a cashback card, where you get 2% back on every purchase. You might consider opening a card with travel perks or points that you can redeem for airline miles for your next card.  

The best credit card for you also depends on your credit score. Some credit cards require a minimum credit score to apply. Other cards are geared toward people with lower credit, such as secured credit cards. 

Before you choose a new credit card, it's a good idea to consider the benefits of your current card(s). You should also consider the annual fee (if there is one) and make sure it can help you meet your financial goals, whether it's more cashback, credit building, or something else. 

Protecting your finances with life insurance

In addition to having multiple credit cards, a life insurance policy can also be a valuable part of your personal financial strategy. Through Ethos, you can purchase term life insurance or whole life insurance. Applicants don't have to take a medical exam—only a short health questionnaire is required. 

Learn more about how Ethos works or get a free quote. If you're getting a policy for the first time, you'll also find helpful resources and tips for buying life insurance.

The information and content provided herein is for informational purposes only, and it is not to be considered legal, tax, investment, or financial advice, recommendation, or endorsement. You should consult with an attorney or other professional to determine what may be best for your individual needs.