Experts recommend having at least one credit card: How many should you have?

According to Ted Rossman, senior industry analyst at CreditCards.com, having a credit card and using it responsibly is a smart way to start building a strong credit score. Good credit is essential for qualifying for loans like mortgages and auto loans, as well as for other things such as buying a cell phone, renting a car, or getting a job. It also helps consumers qualify for lower borrowing costs. However, not everyone uses credit cards optimally. In fact, in 2022, 82% of American adults had a credit card, with about half of them carrying balances from month to month, which can lead to significant household costs due to high interest rates.

Rossman suggests that first-time cardholders opt for a card without annual fees and with zero-interest, at least initially, and pay off their balances in full and on time each month. It’s important to ensure that the interest rate will remain relatively low after the no-interest offer ends. Experts also recommend sticking with just one card for simplicity in managing due dates and other important details. According to Bruce McClary, senior vice president at the National Foundation for Credit Counseling, limiting oneself to one card helps simplify the process of debt management.

While there are virtues to having just one credit card, there can be drawbacks too. Not all businesses accept every card brand, so having multiple card types like Visa and Mastercard could be beneficial. Separating personal and business expenses is another advantage of having two cards, especially for business owners. Experts suggest prioritizing a solid all-around primary card, such as one with no annual fee that offers 2% cash back on all purchases. Additionally, having a second card can help build a person’s credit utilization ratio, which is an important factor in determining credit scores.

Choosing a second card depends on how consumers shop and what rewards and benefits different cards offer. For example, frequent travelers may benefit from a travel rewards card without foreign transaction fees. Websites like NerdWallet and CreditCards.com can assist in finding the best reward card. Having multiple cards increases one’s overall credit limit and can help reduce the credit utilization ratio if used responsibly. It’s important to keep the ratio under 30% across all accounts. According to Cathy Curtis, founder and CEO of Curtis Financial Planning, if having more than one card helps maintain a low credit utilization ratio, it can be a good reason to have multiple cards.