Does It Affect Your Credit to Have Multiple Credit Cards?

Having credit card debt is always a bad thing, because finance charges mean you owe more money over time. Multiple credit cards, however, are essential to a good credit score as long as you manage them properly. Be careful not to have too many credit cards out at once, because it could end up hurting your score.

Identification

Simply having credit card accounts does not hurt your score until you have eight of them, according to The Motley Fool. Actually, you should not have more than eight revolving accounts. Credit cards are the most common type of revolving account, but there are some other revolving lines, such as home equity line of credit.

Benefits

Consumers should have at least one credit card account to get a variety of loans, which counts for 15 percent of a credit score. To have a truly elite credit score -- above 760 -- you should have two revolving accounts for every installment loan to get the perfect mix of credit, according to MintLife. Also, the more credit you have available, the lower your debt to credit ratio, which improves your score by showing that you need a smaller percentage of what a creditor offers.

Increased Risk

The more monthly credit card bills you have the more likely you are to spend money on credit and/or miss a payment. Missing payments or worse, defaulting on a credit card and forcing the creditor to send it to a collections agency, likely outweighs the benefits of taking out extra credit cards. If you are prone to overspending or do not think you can handle so many bills, it would be wise to avoid this extra hassle.

Tip

Financial expert Liz Weston suggests that consumers try to spread out their credit card debt over several cards rather than putting everything on one and not using the other lines. The FICO scoring model dings a person's score when the credit utilization on any account is high -- usually over 35 to 50 percent. Nobody can say what your ideal credit utilization ratio is, so you should aim to keep it as low as possible overall on any particular account.