How Many Types of Credit Cards Should I Have?

Whether you’re new to credit or juggling several balances, you want to know you’re getting the most out of your credit cards. There are many types of credit cards available, each with their own benefits. But how many credit cards should you have, and what types will work best for you?

How Many Credit Cards Can I Have?

There is no limit on how many credit cards you can have. If you’re new to credit, it could be tempting to take advantage of all of that credit now available to you. But taking on too much credit card debt can set you back financially as interest rates rise and bills pile up. You can have as many cards as you’d like, but it’s not recommended for even the most experienced card users.1

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What Types of Credit Cards Are Available?

New and different types of credit cards hit the market every year. But just because there are many options to choose from doesn’t mean every offer is right for you.2 Here are a few common types of credit cards and the lifestyles they work best with:

  • Balance transfer cards allow users to transfer a balance from a high interest rate card to a lower interest rate card. This is a good option if you’re having trouble catching up on a balance because of quickly mounting interest.
  • Low interest credit cards offer a low or zero introductory APR (Annual Percentage Rate) that gives users the freedom to make a big purchase without the stress of paying for it immediately. It’s also a good option for someone with little or no credit card experience as it allows you to get used to the process of paying your balance every month. Be sure to read the terms because your interest rate will jump after the introductory term is over.
  • Cash back credit cards offer cash rewards for simply using the card. Most cash back cards earn about 1% on all purchases while some offer a higher percentage for specific purchases such as gas or groceries. This is a good option if you’re using your card for everyday purchases and can make all your payments on time.
  • Hotel or travel points credit cards offer users rewards for staying at certain hotels or flying with specific airlines. As you get more points, your stays and flights can be discounted, upgraded or even free of cost. This is a good option for someone who travels for business, but annual fees can make it a bad investment for those who don’t travel as much.
  • Retail rewards credit cards offer users rewards for purchases at specific retail companies. These rewards can be used to get discounted merchandise from the retailer while everyday purchases typically produce fewer rewards. Interest rates can be high on these cards, and the rewards program is limited. These cards are a good option for someone that is loyal to a specific brand or makes several purchases through one retailer.

How Many Types of Credit Cards Should You Have?

Every situation is different, and there is no perfect number for how many credit cards to have. If you’re new to credit, starting with one low-interest credit card could be your best option. If you can responsibly manage several cards, having more types of cards allows you to take advantage of rewards programs. These are only some of the types of cards. Research all the types of credit cards, and decide which would benefit your lifestyle most.

Resources:

1.http://www.nerdwallet.com/blog/tips/credit-score/limit-credit-cards/

2.http://www.creditcards.com/credit-card-news/help/types-of-credit-cards-6000.php

General Resources:

1.https://www.discover.com/company/corporate-responsibility/financial-education/straight-talk/apr.html

2.https://www.discover.com/credit-cards/resources/managing-debt/do-you-have-too-many-credit-cards

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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  • Discover It Card

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    Earn big‑time cash back that never expires.

    Sponsored

    Get the credit card that's got it all: Discover it®.

    Discover it® gives you big‑time cash rewards with 100% U.S.‑based customer service.

    Discover it Card

    Sponsored

    Get the credit card that's got it all: Discover it® 

    Discover it® gives you big‑time cash rewards with 100% U.S.‑based customer service.  

    Sponsored

    Earn big‑time cash back that never expires with Discover it®

    Earn big-time cash back that never expires with Discover it. See Rewards
Earn big-time cash back that never expires with Discover it. See Rewards