Financial planning

Effect of multiple credit cards on credit score

An issuer of credit cards allows users to make purchases based on the terms and conditions specified by the card issuer. The additional fees are later on the due date. Your repayment history determines your credit score, the number of accounts you have, and the amount of debt you owe.

Why is a credit score important?

Credit cards and loans with low-interest rates are facilitated by a higher credit score. Additionally, you hold more negotiating power and get approved for credit and loans more easily if your credit score is high

A higher credit score and avoiding utility security deposits can also help you raise your credit card limits. A higher credit score can also help you get a better rate for renting an apartment or house and for getting insurance.

Ways in which multiple credit cards affect credit score

Credit scores are affected in different ways by holding multiple cards. Positive effects are mixed with negative effects. The following are ways of achieving this:

Positive impact

1. Decreases amount owed:

The amount owed decreases when you hold more than one credit card. Using many different credit cards, the debt is not confined to just one account, resulting in a decrease in the amount owed. Therefore, the amount owed diminishes because you use different credit cards.

Take the example of a credit card with a $6,000 limit, and you use 60% of it. Then you might have a problem if you get two credit cards, each with a $2,000 limit, but your usage eventually drops.

People with credit card utilization ratios exceeding 30% are considered credit-hungry by banks, and their credit limits and scores accordingly decrease. The lower your debt is, the better your credit rating and the greater your credit limit. 

2. Creates a backup:

The credit score is also positively impacted by having multiple credit cards. It provides a backup, especially if the primary card is stolen or lost. 

Even though you don’t have your primary credit card, you won’t have to use your debit card because the other credit card is a backup. 

You can also divert payments between multiple credit cards so that your credit limit is not affected and your credit score is preserved.

Negative impacts

1. Difficulty in management:

A credit score is negatively impacted by having multiple credit cards. In the case of payment history, you may have to deal with management challenges.

It is unlikely that all of your credit card payments are due on the same day. Since each card pays on a different day, it is tricky to manage.

A lost credit score is inevitable when you forget to make a payment on time. In addition to the late fee, it is possible that your penalty APR will also go up. 

2. Lenders Avoid People With Excessive Credits:

Credit cards are treated as existing accounts, so if you want to obtain credit, lenders will run detailed credit checks on you based on your credit card history.

So, if you want credit in a short time frame, you’re likely to have more problems getting it as lenders avoid lending to people with excessive existing debts. Furthermore, a new hard inquiry will decrease your credit score, according to FICO.

Thus, if you don’t manage your credit cards carefully and exceed your credit limit, you will face new credit problems, as well as a reduction of your credit score, which is another consequence of owning multiple credit cards.

Positive and negative effects

Both positive and negative effects can be attributed to holding multiple credit cards. You can benefit from having multiple credit cards if you make your credit card payments on time and do not need to borrow additional credit. 

Keeping your credit score above 640 is ideal, but if it is not maintained, you will be adversely affected by a decreased credit score. Thus, if you have multiple credit cards, make sure to use them wisely to avoid getting a reduced credit score.


Are credit scores affected by multiple credit cards?

It is not necessarily harmful to your credit to have too many credit cards. Maintaining a manageable credit utilization ratio will boost your credit score if you have a few credit cards. The average age of your accounts is also decreased when you have a new credit card, which can negatively impact your credit score.

Is it bad to have many credit cards but not use them?

I agree. Your credit scores will likely be positively affected as long as you continue to make your payments on time and refrain from overextending yourself.

What are the benefits of keeping a zero balance on your credit card?

Accounts with zero balances should be kept open even if they are unused. Closed accounts cause your credit to be used up faster, which makes your utilization rate, or balance-to-limit ratio, seem higher.

What happens if you get a credit card but never use it?

Your account may be closed by the credit card issuer if you do not use your card. You are also more likely to commit fraud if you don’t check on the inactive card, and fraudulent charges can affect your credit score and finances.


Credit scores and risk assessments are run by banks when you apply for credit cards. You could lower your score if you have a number of accounts with balances (even if the balances on them are small). People with five credit cards will see only a 10 point drop in their FICO score if they have five cards. Applying for more than one account is okay as long as you pay off any balance before an introductory period expires. Otherwise, interest rates may increase.

Payal Sshrotiya

Payal is a financial writer at Wealthbooking and Helpingdesi. Her work featured in Quora, Medium, and many top websites. She gained huge followers in Quora and Linkedin in a very short time. Payal is the one to contact if you want to know anything about Linkedin. Payal graduated from Rajasthan University with a master’s degree in Finance HR. When not writing about the Financial market and ruminating over competitive advantages, she enjoys spending time with family and cute nephew Gannu& shubh

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