How many credit cards do we actually need?

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If used properly, credit cards are actually excellent for making purchases, building a great credit score and, obviously, earning some hard-to-ignore perks, if you have a reward card or more. But there’s actually a big question which a lot of people have: how many credit cards are actually necessary?

How much is enough?

According to CNBC, the average US citizen has 3.1 cards, while the average balance is $6,354 across all of them. Therefore, is this number of cards too big or do we need more?

Greg McBride, chief financial analyst at Bankrate.com, reveals that “there’s not a one-size-fits-all answer,” as the number of credit cards actually depends on the personal needs of each holder.

“It depends on what you’re using credit for and if you’re disciplined about paying the balance in full every month,” he added.

But still, is there an exact number? How many cards are enough, so you can keep track of them without racking up any debt? Technically speaking, if you manage to pay off your entire balance every month, getting more cards will actually increase your credit card score.

The latter happens because part of your credit score is calculated considering your credit utilization ration, this being calculated by dividing your balance by your credit limit. In an ideal situation, you can use 10 percent of your available credit line, but no more than 30 percent.

Each time you open new credit cards, the amount of credit you can access will increase. Even more, if you stick to the same spending habits, your credit utilization ration will automatically improve.

But we’re not done yet!

Credit cards come with several advantages and here we’re talking about rewards credit cards. They bring airline miles, hotel points or even part of your cash back. If you use a credit card regularly and it’s adjusted to your needs, it will actually pay off pretty nice.

Finally, let’s not forget about the temptation of a credit card! Spending more can become a possibility, so if you know that you can’t control yourself, you’d better stay off from carrying too many credit cards.

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