Credit cards are without a doubt the most vilified of all of the credit products not called “payday loans.” Credit cards can influence your credit scores for the good or the bad. And, cards can make your life convenient or miserable. And if you do have credit cards one of the questions that you have probably contemplated is just how many credit cards should you have?

This is one of my favorite topics on which to write. This issue of “how many” is a common question that consumers have and also about which the fake finance experts love to bloviate. So, how many is enough? Is one credit card enough? Are five credit cards too many? Everyone seems to have an opinion, and a hard time justifying it.

At the risk of spoiling the ending, there’s no such thing as the right number of credit cards other than to say this…zero isn’t the right number. The right number of credit card accounts for you is going to be different than the right number for someone else. And whether you have one credit card or twenty, it’s possible to maintain fantastic credit scores without going into a penny of debt.

The right number of credit cards is about credit scores and usability

Here’s how you should determine the “right” number of cards for you. How large is your wallet? If your wallet can hold 15 cards, then 15 cards is the right number for you. Of course, that’s an absurd notion, but it’s not far from the truth.

Let’s do some math. Grab a calculator and pull your credit reports. You can do so for free at www.annualcreditreport.com.  Now highlight all of your open credit card accounts. Be sure to count all of them, including retail store cards and gas cards.

Now add up all of your balances. Now add up the credit limits of all of your open cards as they appear on your credit reports. You may have some cards that are open but do not have a balance. Be sure to count those too. Now divide the sum of your balances by the sum of your limits, and multiply that number by 100. That’s your revolving utilization ratio and you want that number to be as low as possible.

If that number is above 10% then it’s too high. If it takes you opening one or two more cards and not using them in order to get down to 10%, then you’ve just identified the right number of cards for you. Be sure to also consider what your normal monthly credit card usage looks like so you’ll know, on average, what kind of utilization you’re carrying around.

To put it simply, you need to have enough credit cards to keep that ratio at or below 10%. If you’re already able to do that with your current inventory of cards, then you have the right number for you. If you need two or three more cards, then that will be the right number for you. Now, do you understand why some guy on television’s opinion about the right number of cards isn’t going to be relevant to you?

According to Experian, the average consumer has three credit card accounts. That seems too low to me.  In addition to the utilization ratio issue we’ve already addressed, you also have to consider usability. What if one of your cards gets lost or stolen or compromised? Do you have a suitable replacement while you wait for your card issuer to send you a new card? What if your card was stolen while you were on vacation and you don’t have the luxury of time to wait for a new card?

I have 13 credit cards. I use three of them for various purposes and no, I never carry a balance so I never pay interest. And, I never spend more than I would have if I was paying with cash. That’s the other criticism of credit cards, that they magically make you spend more than you would have otherwise. Because I have so many cards I will never get close to that 10% utilization threshold. And, because you have no financial liability for credit card fraud it doesn’t really matter if one of your cards gets stolen or compromised.

Bottom line

When you’re responsible with your credit card accounts, you cannot have “too many” of them. Have as many or as few as you want. More is always going to be better than less, because of that utilization issue. Just be sure not to try to open too many cards in a short period of time or you may find yourself being declined.