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How Many Credit Cards Do You Have Open At Once And How Does That Affect Your Credit?

by on September 22, 2013 · 24 comments

in Credit Cards, Credit FAQ, Sunday Reader Questions, Video Blog Post

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Update: The offers mentioned below for the Starwood Preferred Guest Credit Cards from American Express has expired. View the current offers here – personal, business.

This question comes from TPG reader Seth, who asked:

“How many credit cards do you have, what are the effects of having so many cards open at once, and do you ever decide to close them?”

At the moment, I have 19 active credit cards – and that’s a number that scares some people, but the fact of the matter is that over the years as I’ve opened more credit cards, my score has actually gone up. A lot.

Main credit score factors

Main credit score factors.

That’s because the two largest factors determining your credit score are payment history and amounts owed – which add up to a whopping 65% of your score! Because I make sure to pay off my balances in full on time every month, I have a pristine payment history, and my amounts owed are pretty much nil, so my debt-to-credit ratio is very low, which boosts my score. So in general, the more accounts and credit you have that you’re paying off on time, the higher your score will be.

That said, I actually got into a discussion on Twitter with someone earlier this week about whether applying for a lot of credit cards lowers your score – they were saying it does not, while the fact of the matter is that every credit card application you make dings your score by about 2-5 points. Now, that’s out of a total of 850 possible points, so it’s not a huge number, but it’s still something to keep in mind.

That’s a bit different from applying for other types of credit, such as a mortgage, because if you apply for a mortgage from six different banks, say, your credit report will still just list it as a single inquiry if you do it within a concentrated period of time (like two weeks or so) since you’re really just applying for a single line of new credit for that one mortgage. However, each credit card application will be listed separately since each credit card you open will be listed as a new line of credit.

When applying for credit cards in the past, I have occasionally been denied for having too many inquiries at a time, but a simple call to the issuer to explain that I pay off my bills on time and am a savvy consumer and that’s usually enough to get me approved even if the application is initially put into “pending” status.

A stack of credit cards

When do I close a credit card? That’s a great question that comes up a lot. Personally, I do a yearly inventory of my credit cards that helps me decide whether a card is giving me enough perks to keep it around – like whether I get a free night at a hotel that outweighs the cost of the annual fee on the Hyatt Visa, for instance, or category spending bonuses or annual spending threshold bonuses that earn me tons of extra points or perks. So if a card isn’t continuing to work to your benefit that makes it worthwhile, you can consider canceling it. Before you do, though, call the issuer and ask them if they’re willing to work with you by doing something like waiving the annual fee or giving you bonus points that could make it worth keeping it open. Or you could also apply for a new credit card from the same issuer then merge the two lines of credit onto your new card before canceling the old one in order to keep that line of credit open and active so it has less of an impact on your credit score.

I wouldn’t suggest closing a card within 6 months of opening it, both because it will have a negative effect on your credit score and because technically an issuer can take back any points it awards you for opening that card. If in good faith, however, you have opened a card and then decide you no longer want it, it’s okay to close it eventually.

Now don’t go out and apply for 22 credit cards yourself right now! Mine is a long-term approach and one I’ve been working on for a while now. Just do what you’re comfortable with. Some people apply every 3-6 months, some people apply whenever there’s a great offer that comes out. Find a strategy that works for you and get the credit cards that you want.

If you have any more questions, go ahead and Tweet me @thepointsguy!

In the meantime, here’s my current roster of credit cards.

American Express

Mercedes-Benz American Express Platinum
Current Sign-up Bonus: 50,000 points when you spend $3,000 in the first 3 months
Annual Fee: $475
Other Benefits:  You will earn 5 points per dollar spent on select Mercedes-Benz purchases and 1 point per dollar on all other purchases. You will receive a $1,000 certificate every year when you spend $5,000 or more on your card, which can be used on a future purchase or lease of a Mercedes-Benz vehicle. This card also comes with the same benefits as the Platinum Card from American Express such as a $200 annual airline fee rebate, lounge access and Global Entry application reimbursement.

Business Gold Rewards Card from American ExpressUpdate: This offer expired on October 29, 2013. View the current offer for the Business Gold Rewards card.
Current Sign-up Bonus: 50,000 points with $5,000 spend in the first 3 months
Annual Fee: $175 waived the first year
Other Benefits: Earn3X points per $1 on flights booked directly with airlines, 2 points per dollar on US purchases for advertising in select media, shipping and at gas stations, and one point per dollar on other transactions. Receive Purchase Protection, Return Protection, Extended Warranty, Travel Accident Insurance, and Car Rental Loss and Damage Insurance.

American Express Premier Rewards Gold Card
Current Sign-up Bonus: 25,000 points after $2,000 spend in the first 3 months
Annual Fee: $175 waived the first year
Other Benefits: Earn 15,000 points after you spend $30,000 in purchases annually. Earn 3 points per dollar on airfare, 2 points per dollar on US supermarkets and standalone gas stations, and one point per dollar on all other transactions. Receive a $75 hotel credit and room upgrade at check-in when you book a minimum 2-night consecutive stay with the Gold Hotel Collection.

Starwood Preferred Guest Credit Card from American Express and Starwood Preferred Guest Credit Card For Business
Current Sign-up Bonus: 30,000 bonus points – 10,000 after first purchase and another 20,000 with $5,000 spend in the first 6 months. Offer ends September 3, 2013.
Annual Fee: $65 waived the first year.
Other Benefits: Receive credit for 5 nights and 2 stays annually toward the next level of SPG Elite Status, earn up to 5 Starpoints for each dollar of eligible purchases spent at hotels in the SPG portfolio that can be transferred to more than 30 airlines, and get purchase protection for up to 90 days after the date of purchase.

Platinum Delta SkyMiles Card From American Express
Current Sign-up Bonus: Receive 5,000 Medallion Qualification Miles (MQMs) and 15,000 bonus miles after making a first purchase on your new Cardand an additional 15,000 bonus miles after spending $500 on purchases on your new Card in the first three months.
Annual Fee: $150
Other Benefits: Additionally you will earn 2 miles per dollar spent on Delta purchases and 1 mile per dollar spent on everything else. You can get 10,000 MQMs and 10,000 bonus miles after you spend $25,000 in a calendar year. Then, get another 10,000 MQMs and 10,000 bonus miles after you reach $50,000 in that same calendar year. Check out this post to see why I decided to get the Business Platinum Delta SkyMiles card.

Chase

Ink Plus Business Card
Current Sign-up Bonus: 50,000 points with $5,000 spend in the first 3 months
Annual Fee:$95 waived the first year
Other Benefits: Earn 5 points per dollar at office supply stores, cellphone, landline, internet, and cable TV services and 2 points per dollar spent at gas stations and on hotel accommodations, up to $50,000 annually. Receive a complimentary LOUNGE CLUB membership and 2 free visits each year with access to over 350 VIP airport lounges.

Chase Sapphire Preferred Card
Current Sign-up Bonus: 40,000 points with $3,000 spend in the first 3 months
Annual Fee: $95 waived the first year
Other Benefits: Earn 2 points per dollar on all travel and dining. Receive a 7% annual points dividend on all points earned throughout the year. No foreign transaction fees.

Chase Freedom
Current Sign-up Bonus: 10,000 points after you spend $500 in the first 3 months
Annual Free: $0
Other Benefits: Earn 1% cash back on everything you buy. Another benefit of this card is that each quarter you can activate your Freedom card to maximize category bonuses. In Q3 you’ll earn 5% cash back on up to $1,500 at gas stations, theme parks, and Kohl’s.

Hyatt Credit Card
Current Sign-up Bonus: Earn 2 free nights at Hyatt properties worldwide after you spend $1,000 in the first 3 months.
Annual Fee: $75
Other Benefits: Earn 2 free nights at Hyatt properties worldwide as well as 3 points per dollar spent at Hyatt, 2 points per dollar spent on all dining, airfare and car rental purchases and 1 point per dollar spent everywhere else. Read this post for details on other Hyatt Visa Perks.

British Airways Visa Signature Card
Current Sign-up Bonus: 50,000 Avios with $2,000 spend in the first 3 months
Annual Fee: $95 waived the first year
Other Benefits: Spend $30,000 in a calendar year and receive a Travel Together Ticket good for two years. Earn 2.5 Avios for every $1 spent on British Airways purchases and 1.25 Avios for every $1 spent on all other purchases. No foreign transaction fees.

United MileagePlus Explorer Card
Current Sign-up Bonus: 50,000 miles with $2,000 spend in the first 3 months (ONLY IN CHASE BRANCH) or 30,000 miles with $1,000 spend in the first the months
Annual Fee: $95 waived the first year
Other Benefits: Get first checked bag free and priority boarding on United-operated flights. Receive two United Club passes per year. No foreign transaction fees.

Update: This offer is no longer available. View the current offer for the Chase Southwest Rapid Rewards credit card here.

Southwest Rapid Rewards Premier Visa
Current Sign-up Bonus: 50,000 points after you spend $2,000 in the first three months.
Annual Fee: $99
Other Benefits: With this card you will earn 2 points per dollar spent on Southwest Airlines and AirTran Airways purchases as well as Rapid Rewards Hotel and Car Rental Partner purchases and 1 point per dollar spent on all other purchases. Read this post for more information on the Companion Pass.

Citi

Citi Hilton HHonors Reserve Card
Current Sign-up Bonus: 2 weekend night certificates after you spend $2,500 in the first 4 months.
Annual Fee: $95
Other Benefits: Receive complimentary Hilton Gold status with the card and Hilton Diamond status when you spend $40,000 within a calendar year. You will earn 10 points per dollar spent on hotel stays within the Hilton HHonors portfolio, 5 points per dollar spent on airline and car rental purchases, 3 points per dollar spent on all other purchases.  You can also earn a 3rd Free Weekend Night certificate if you spend $10,000 annually. There are no foreign transaction fees with this card. Read my full review of the card here.

Citi Platinum Select / AAdvantage Visa Signature (unverified)
Current Sign-up Bonus: 50,000 AAdvantage miles with $3,000 spend in the first 3 months
Annual Fee: $95 waived the first year
Other Benefits: Receive a $100 American Airlines flight discount every year with $30,000 or more in purchases. First checked bag is free for you and up to 4 travel companions and get Group 1 priority boarding when flying on American.

Citi Executive AAdvantage World Elite Mastercard
Current Sign-up Bonus: Earn 30,000 AAdvantage miles when you spend $1,000 within the first 3 months.
Annual Fee: $450
Other Benefits: With this card you’ll get your first checked bag free, Admirals Club membership privileges, 25% off in-flight purchases, and no foreign transaction fees. Each calendar year when you spend $40,000 on your card you will earn 10,000 AAdvantage elite qualifying miles. In addition when you make American Airlines purchases you will earn 2 miles per dollar and 1 mile per dollar earned on all other purchases.

US Bank

Club Carlson Premier Rewards Visa Signature Card
Current Sign-up Bonus: 85,000 Gold Points, 50,000 of which will be earned after your first purchase, plus 35,000 more points once you spend $2,500 within the first 90 days.
Annual Fee: $75
Other Benefits: You will earn 10 points per dollar spent at participating Carlson Rezidor hotels and 5 points per dollar spent everywhere else. Club Carlson cards come with Gold status and a bonus award night.

Other

Bank of America Virgin Atlantic American Express Card – no longer being offered.

MBNA/Bank of America University of Pittsburgh No Annual Fee Card: Keep since I’ve had the account open for almost 10 years.

Capital One Basic Card (I even forgot the name since I never use it!): Keep since I’ve had the account open for almost 10 years.

For more information on applying for credit cards, maximizing them and taking inventory of your credit card portfolio, check out these posts:

When To Cancel A Credit Card: My Personal Card Inventory and Decision Process
How To Check Your Credit For Free: Step One In My Credit Card Application Preparation

Do You Stop Spending on a Credit Card After You Get The Sign-Up Bonus?
How To Handle Getting Denied For Too Many Credit Inquiries?

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Kevin

    Hey TPG – great post! I’m a little surprised you have the Southwest Premier Visa and the Hilton HHonors card. You never really mention that you fly Southwest or stay at Hilton. Have you had those cards for awhile, or did you just sign up for them because of the recent promotions like the Southwest 50k miles, which I agree is a pretty amazing deal. I’m just curious when you applied for those cards and if you plan on keeping them open for awhile or close them out at your next annual “credit card inventory” check. Thanks in advance!

  • Kim@Eyesonthedollar

    I have applied for probably 6 credit cards this past year, and have a 770 credit score. We just applied for a mortgage to buy a rental property and had no problem getting approved. As long as you pay them off every month and make sure you are good in other credit areas, I actually think having a large amount of unused credit can help your score long term.

  • Rebecca D.

    I really need to put together an inventory of all my cards, annual fee, benefits, etc. What’s the easiest way to find out what month I opened the card? Checking statements isn’t always possible for cards a few years old and calling the company for each card is pretty time consuming. Hoping there’s a short cut I’m not thinking about.

  • Nigel

    Great post! I’m curious as to how you decide which card to use at any time? I gave up tracking points and simplified my life by going to Fidelity Amex an Fidelity Visa. Instead of points I get 2% cash back deposited directly into my account. Year to date that’s $1900 and no fees. And I have no restrictions on how, when and where to use the rewards.

  • Jasanna

    Thanks for that! My question is: how do you keep them all organized and know when to use them for what? I assume you don’t have all 19 in your wallet. My husband and I each only have 3, on top of our normal bank cards, AAA card, Paypal, etc. So how do you have the correct “everyday” cards with you and what’s your organization system? This is my hangup. :)

  • http://roymarvelous.com/ roy marvelous ϟ

    Does this apply for Canada as well? It seems like all the best credit card deals are in the USA. Btw how successful are you at getting the annual fee waived?

  • Ben Price

    I’m no TPG, but I’ve been doing this for almost a year (10 open credit cards). This is how I keep track: I have one amazing Excel spreadsheet–which I got off a FT forum. Tells me when I applied, when I activated, last 4 of account number, payment dates, bonus, bank, where credit is pulled from, among other factoids.

    How I keep track of which card to use: my two everyday cards are the SPG Amex and the CSP. I use CSP for all things travel and dining…SPG for everything else.

    As for those other 8 active accounts…I only use then until I hit the bonus and pay the card off. Once it’s paid off, I throw it in a drawer, go back to CSP/SPG, and do a cost benefit analysis of whether to keep/ditch when my Excel spreadsheet tells me the AF is about to hit.

  • Confused

    I know everyone says applying for credit cards only drops your credit score 2-5 pt. per card. However, I applied for 4 credit cards over 2 months and my credit score dropped 46 pts. according the credit sesame, why is that? My rating is still excellent (but just barely); nothing else has changed my credit usage is under 3%, everything paid on time etc.

  • Brandon

    One thing to keep in mind when it comes to closing credit cards is whether or not the card is churnable. That’s a point I don’t often see talked about in discussions of whether or not to cancel a card. For example, when it comes to the Delta cards and the Starwood Amex I think, the sign-up offer is not valid for people who have had that card in the last 12 months. So if you have either of those cards, or cards with similar policies, and are offered a retention bonus around your cardmember anniversary, it might be a good idea to forgo the retention bonus and cancel the card anyway, because it would allow the opportunity to wait 12 months and get the sign-up bonus again. Why don’t people think about this very often when I read online discussions about whether to close or keep a card?

  • Brandon

    Another question: on your Amex Premier Rewards Gold card, do you get a category bonus for buying Visa gift cards at 7-11 or other gas station convenience stores?

  • Newbie N

    TPG, this is an awesome post! I’ve actually wondered what cards you keep. It would be helpful also to know which cards you’re actively paying the fee on and which ones are in their first year with waived fee for those that this would apply too. For example do you pay for the amex prg and brg? Also, just wondering if you use a savings or checking account that earns points (like bankdirect or ufb)? Thanks.

  • Brian L.

    How many credit cards did you have before you applied for the 4 cards over two months? If you only had one or two, and then add 4 in a short period, your average age of accounts will go WAY down.

  • Robert

    Paying off my bills on time and being a savvy consumer are not necesarilly enough to get approved for a credit card. Not at least in case of US Bank and Barclay who tend to reject a business version of their plastic while accepted for the personal ones. More importantly, it looks like the argument ‘too many recent applications’ is quite difficult to refute. I’ll see it in a few months when trying to obtain some 4th, 5th, 6th, or so card from Amex, Citi and Chase respectively:)

  • Jason

    Can you post a link to the forum where you found this helpful spreadsheet?

  • thepointsguy

    Haven’t done that.. not sure if someone else can chime in here

  • Lisa Johnson

    Nigel, how are you able to withdraw the funds from the Fidelity Amex? Don’t they need to go into some sort of investment account in order to get the 2% cash back? Thank you.

  • Gabriel

    I’ve recently had a reconsideration agent at Chase read back to me all the credit card accounts that I have and although I successfully ‘distracted’ him from asking me why I have so many cards (10 total), what would you suggest be my reply as to why anyone would have so many credit cards open?

  • Ben Price
  • Sean McR.

    I though I had too many: #16. After seeing this, I may stick with some of my no-frill cards to hold up my AAOA. I just have to find a wallet that can store my cards that are not being used.

  • FlavCity

    Great Article! I believe this is the #1 misunderstood issue with most people that prevents them for racking up credit card perks. #SuchaShame

  • Pingback: 10 Signs You’re Addicted to Miles and Points | The Points Guy

  • Lane

    I noticed that you did not list any cards with Barclay. Their Arrival card has been receiving a lot of hype lately for the rewards it offers. Will you be applying for that anytime soon?

  • Gin

    I get a bit confused with new inquiries. On credit karma I have a C with 6 inquiries, but if I open up more and get to 6-8 it will be a D rating and beyond that an F. If I have A and B on the other areas does it matter much if I open up more credit cards. My score is above 760 and I have maybe 10 cards. Any advice?

  • John Hill

    Thanks very much for all the posts and great info. Just used your link to apply for the Citi HHonors and was approved. Just want to say how annoying it is to see people comment that your links are some kind of evil thing. Obviously they are reading your posts (and the comments). Anyway, I appreciate the advice and feel like applying through a link is a small way to say thanks!

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