Last updated: 16/11/2020 | Estimated Reading Time: 5 minutes
There is no legal limit to how many credit cards you are allowed to have at any one time. It is, ultimately, up to the credit card issuers.
We’ll help you work out how many credit cards you should have depending on your needs, and what to do if you think you’ve got too few or too many.
In This Guide:
- Do I need another credit card?
- Credit cards and credit ratings
- Different types of credit card
- Should I cancel any existing cards?
Do I need another credit card?
There’s no real definitive answer to this question – it all depends on your individual requirements as there are a range of different cards available, each with different specific purposes in mind.
However, here a couple facts that might help you on your way to working out how many cards you should have:
- The average number of credit cards held per person in the UK is 1.7
- Your credit score could be adversely affected both by having too many cards, and by having no cards at all
The key thing you should be working out is what exactly you think you need credit cards for, rather than simply how many you need.
For example, someone with a decent cash flow and excellent credit score might want one standardlow APR credit card, and one reward based card.
Someone with a poor credit score might want to stick to just one credit builder card until such time as their improved credit score allows them to take advantage of better credit products.
Credit cards and credit ratings
One of the biggest factors that will decide both how many cards you can take out and how good a card you can take out is your credit score.
In short, the better your credit rating, the more and better credit cards you’ll be able to get. A good credit rating will present you as a good candidate to lend to in the eyes of a card issuer.
If your credit score is poor or limited, you should consider using a credit builder credit card that can improve your rating as you use it, so long as you pay off the balance promptly and regularly.
To find the best credit builder cards, head over to our credit card comparison page and see what kind of representative APRs and credit limits you could get.
Different types of credit card
So that you can work out what kind of card you want and from that, how many cards you should have at any one time.
Low-APR Credit Cards
Cards with a low APR, or annual percentage rate, are a great option for those who want one card that will last for a while as a consistent source of credit.
You won’t, on the whole, get any extra benefits from these cards beyond a low borrowing cost, but this should be enough of an incentive in itself.
0% Purchase Cards
There are cards available that will, for a set period of time, charge you 0% interest on purchases made. This makes these cards essentially an instant, free loan while the interest free period is active.
You should take care to halt spending and, ideally, cancel the card altogether once the interest free period finishes as when it does, the rates charged are often much higher than average.
0% Balance Transfer Cards
Cards that charge 0% on balance transfers can be a great tool if you want to escape existing debt.
What they allow you to do is to transfer debt from an existing card on to your new balance transfer card and thereby delay paying interest on the initial debt until the 0% period ends on the new card.
Reward and Cash Back Cards
If you’ve got a decent credit rating, and are confident in your ability to keep up with repayments, then a rewards based card could be just the thing for you.
These cards offer rewards like cash back on certain purchases or points redeemable on flights for every pound spent.
Rewards and cash back cards tend to come with relatively high annual percentage rates, or APR, and so you should only really take one out if you’re sure that you’ll be able to pay the balance off each month.
Credit Building Cards
Credit building cards are designed for people with poor or limited credit histories. They come with high APRs and low credit limit to promote or ensure responsible credit use.
By spending on these cards and paying off the balance regularly and in full, you’ll improve your credit score over time by proving your ability to use credit properly.
Once your credit score has improved sufficiently, you’ll be able to then take out better credit cards in the future.
Comparing Cards Online
Whichevertype of credit cardyou want to take out, you can be sure that you’re getting the best rates possible by using a free online comparison service like ours.
Should I cancel any existing cards?
Any cards you have lying around, unused may well have a negative effect on your credit rating. As such, every now and then it’s worth taking stock of any cards you do have to work out which you should keep and which you should cancel.
Any cards you’ve taken out in order to benefit from a set period of 0% on purchases or balance transfers should only really be kept active while the 0% period is on-going. After this, the cards are expensive to use and you gain no real benefit by keeping the accounts open.
The kind of card you’ll want to be keeping for the long term will be a solid, reliable card with a decent credit limit and as low an APR as possible, so that you can keep using credit comfortably into the future without having to worry about huge bills racking up.
