During times of recession or economic volatility, it is common for consumers to turn to credit cards for spending. In the second half of 2022, Canadian credit card debt mounted to historic highs and totalled $1 billion for the first time in history. With so many people struggling to get by financially, how many credit cards is reasonable for a person to have? Is 3 credit cards too many? 

While there is no limit to the number of credit cards you can have, the more you sign up for the more it can impact your credit score. This is especially true if you apply for several credit cards over a short period of time. In the grand scheme of things, 3 credit cards aren’t considered a lot but just know that they can affect your financial standing. 

In 2022, Americans owned an average of 3.84 credit cards per person, a number that actually fell from 2019. Remember the more credit cards you have, the more it makes you look like you are in financial distress. Even if this is not the case, it will appear this way to credit bureaus and government agencies. So is 3 credit cards too many? Let’s look at the cases for and against holding 3 or more credit cards in your wallet!

Is 3 Credit Cards Too Many?

While owning 3 credit cards isn’t the worst thing in the world, it is certainly leading you towards a slippery slope. Truth be told, there isn’t much need to hold more than three different credit cards. The more you spend across these cards, the more difficult it will be to pay off your debt. 

Not only do you have to worry about the balances, but you also have to worry about the payment cycles each month. Don’t even get me started about the time it takes to get a credit card charge refunded either!

Now before you start talking about the benefits and rewards associated with credit cards, we are just talking about the payments right now. We will get into the details of credit card rewards shortly.

What Happens if I Apply for 3 Credit Cards?

The main question here is how close together did you apply for these cards? If you spread them out over a few years then it will not be as detrimental to your credit score. But if you applied for them all in the same year, or even within a few months, your score could take a hit. 

You have to understand how this looks to credit bureaus. On the surface, it appears that you are short on cash. You need to borrow money through credit cards to pay for purchases. This might not be the case but there is not really any way for them to know that. So is it the end of your financial world if you have three credit cards? Not at all, and we’ll explain why a bit later. 

One other thing you will want to be conscious of is that it is not just credit bureaus that are alerted. Applying for too many credit cards in a short amount of time can ring alarm bells for other lenders as well. If you apply for multiple credit cards in a short period of time it is telling banks and other lenders that you are preparing to be over-leveraged. Again, this might not be true, but it is not a great message to send about your financial situation.

Is it Good to Have 3 or More Credit Cards?

Good might not be the best way to put it. Holding 3 or more credit cards is fine as long as you space out your applications. The general rule of thumb in the financial world is to wait at least 90 days between applications. If you can wait longer it is even better. 

Why is it good to have 3 or more credit cards? Having multiple credit cards can help to build your credit score faster. Obviously, you will need to keep on top of your payments each month and juggle all of the due dates. One thing to consider is using the 15/3 rule for paying off your credit cards. This is when you pay half of your credit card bill 15 days before the due date and the rest 3 days before the due date. 

Why does the 15/3 rule work for credit cards? It leaves you with a smaller amount due at your account statement date. Does this really make a difference? Apparently, it is a credit card hack that is more for people who need a quick boost and is struggling with their credit scores. 

Related Financial Geek Article: Why Having A Lot of Unused Credit Cards Isn’t Bad

What are the Benefits of Using 3 Credit Cards?

One of the best benefits of using multiple credit cards is that you can take advantage of rewards points. A lot of credit cards come with extra benefits or rewards these days. Cash back cards are common, as are rewards points, travel miles, and even earning Bitcoin. There are even prepaid credit cards which are accepted at most places.

Applying for these credit cards can often net you a large number of bonus points. Taking advantage of these sign-up bonuses can provide you with a free vacation if you play your cards right – pardon the pun! If you are going to sign up for credit cards to get their bonuses, then remember to wait 90 days between applications so you do not impact your credit score. 

Also, remember to keep track of your balances and do not spend more than you can afford to pay. Credit card debt is no joke and can be a dark downward spiral that is difficult to find your way out of. 

The Bottom Line: Is 3 Credit Cards Too Many?

Ultimately the number of credit cards you sign up for is up to your personal preference. If you can keep your spending under control and remember to pay your bills, then there can be benefits to holding 3 credit cards. Just keep in mind that applying for them over a short period of time can have a negative impact on your credit score!

We hope this helped! Thanks for reading!

Geek out. 

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