Can Having Too Many Credit Cards Hurt Your Credit Score?

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I got three e-mails with this same question yesterday! Mostly, people want to either participate in balance transfer arbitrage or grab a few new rewards cards.

To start off, we must realize that all credit scores are based on secret formulas, supposedly generated by supercomputers and mountains of data to accurately predict our creditworthiness. This results in companies like FICO never truly revealing the ingredients to the secret sauce, otherwise we could just do it ourselves and they’d have nothing to sell.

fico data turned into fico scores

In other words, nobody truly knows the answer. Now, I have never read anything official that specifically listed “number of credit cards” as a negative factor in scoring. We can only examine what they have revealed and try to read between the lines. For example, FICO has previously released this breakdown:

image altered from original in wikipedia:

Some of these aren’t related at all to the number of credit cards you have, such as “on-time payments” and “mix of credit used”.

Capacity used – This simply means how much of your available credit you are using, sometimes referred to as utilization ratio. If you’re maxed out on all your cards, obviously that’s not a good sign. If anything, having more credit cards would mean more available credit would lower this your utilization ratio and be a good thing. Now, individual creditors might balk at someone having too much available credit, but it doesn’t appear to factor into the FICO score.

Length of credit history and past credit applications – To be specific, not the only length of your oldest line, but also the average age of all your accounts matters. Continuously opening new credit lines will hurt your credit score. At the same time, having a lot of old cards can “anchor” your average account age as well. For example, if I already have 20 cards averaging 7 years old, adding another new credit card won’t make that average budge hardly at all. Again, we see that if anything, having a lot of cards might actually be helpful. (This is why I also don’t cancel credit cards unless it’s profitable to do so.) However, opening a bunch of cards all at once is also an indicator of desperation, so I limit myself to about 3-5 credit cards per rolling 6-month period (for profit and more profit).

Another source of information is the FICO Score Estimator from myFICO. Here, how many credit cards you have is the first question asked! Uh-oh. But again, I think the first two questions mainly help determine your average account age. It’s also a filter as you need at least one card that is 6 months old for the estimator to work. If you look at all 10 questions you’ll see many parallels with the pie chart factors.

Finally, there is personal experience. I have over 20 credit cards (average is ~10 per consumer) and have seen no indication that having too many credit cards makes my score any lower. When not in 0% debt, my score is excellent. Therefore, if you ask me, having too many credit cards may give people too much temptation or too much clutter, but based on the evidence available I don’t believe that having too many cards by itself lowers one’s credit scores.

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  1. Great post. Love the pie chart. This is extremely informative and easy to understand.


  2. SavingDiva says

    Great post! I always wonder about the FICO scores. I know mine is good (I had it checked for insurance), but I don’t actually know what it is.


    I used to own a lot of credit cards – due mostly to unnecessarily and naively signing up for various cards during college to get those coveted free T-shirts 🙂

    I canceled the majority of them before I learned about the potentially negative FICO effects of canceling older credit accounts. But I think in general it is best never to cancel a card (especially if it is an old account…unless you are having a serious issue handling your credit card debt..

    Do you think waiting every 6 months before acquiring 3-5 new cards helps to minimize and soften the negative FICO credit score impact?


  4. Nice informative review. One more thing to add to FICO that I have read on your and other sites: pay more than minimum, even on 0% debt cards. It shows liquidity to the credit issuers. This is why I try to add just a couple bucks more than the minimum payment.

  5. Independent George says

    Heh. I just watched my FICO score plummet almost 100 points after a 200k mortgage, plus an additional $4k in credit card debt (on 0% cards), suddenly appeared in the course of a month. I really can’t blame them, but the score should climb back up once I start making payments. Theoretically, it could even be higher. Hopefully it’ll be in time for me get a new 0% card for balance transfers; if not, I still have enough saved to pay the CC balances when the bill comes due.

  6. I recall reading an article about the guy with the world record largest number of credit cards–apparently he has a perfect FICO score!

    I would say this would be pretty good evidence against having too many credit cards.

    Although it won’t hurt your credit score, other factors play into how issuers decide if you need a card–such as how many you have from that issuer. This is not usually a big problem and can be fixed with reallocation of credit or changing one of your cards you already have.

  7. I missed a payment, and the 0% offers went from 0% fee free to 0% with fees. Ouch! I think that this happend because I just took out a mortgage and had just opened a couple of retail consumer cards…

    Just three months later the 0% offers with no fees (balance transfer etc) are back and my credit lines have been increased…

    Agreeing with your post, it shows that the on time payment thing is very important as is how many accounts.

  8. Another perspective of the almighty FICO score is that it is composed of the following components:

    How much debt you have
    How have you been paying on your debt
    How long have you been in debt
    What type of debt do you have
    And what types of debt have you been trying to get yourself into

    The FICO score is a debt indicator score — unfortunately our society seems to think you can’t exist without a high debt indication score (OOPS I meant FICO score)

    I personally don’t have a FICO score– I don’t borrow money. The amazing thing is by not borrowing money, I have this leftover stuff after each payday — MONEY!

  9. I think that the time it took to get a lot of CCs play a significant part in affecting your FICO score. (Disclaimer: this is my non-expert opinion)

    If several of them were obtained in a relatively short period of time, then your score will go down (note: subjective terms used). The rationale being that you’re trying to increase your credit limit without necessarily increasing your means to pay them. Hence, you are tagged to be a credit risk. On the other hand, you can have 20 or more CCs, but if distributed over decades then I think it won’t affect your score that much.

  10. One thing I don’t understand is the effect of paying off mortgage on the credit score. My intuitive feeling would be that it shall be good as it shall improve one’s utilization ratio. Yet, I read on one blog that the author’s FICO decreased slightly after he paid off his mortgage. The estimator linked doesn’t seem to allow for possibility of having paid off mortgage.

    J.C. — no it is how little debt you have and how good you’ve been in paying off what you borrow — see explanation of utilization ratio. People who pay their balances in full have higher FICO than those who don’t so your list doesn’t hold water. BTW, I hope you have either already own or have enough money to buy your home for cash. And you are making too many assumptions. I’d venture to say most people who frequent these blogs pay their credit card balances in full (except when using 0% offers for arbitrage) and have money left after each payday as well – quite a few may have a lot more left than you do. For the record – I use credit cards, I pay my balances in full every month, I have no debt AND a good FICO; and I also have plenty leftover money every month. So you can have a perfect credit score, have credit cards and have no debt. BTW – I used to be a landlord and I would be reluctant to rent to someone without a good FICO score. Unfortunately in the current system it would be impossible for landlords to distinguish between people like you and people who have low FICO score for not paying their debt. I might’ve taken a chance if I really liked you (like I did my tenants – but sometimes you just see people and have a really good feeling about them, don’t count on it to work every time) and if you paid a few months worth of rent in cash, then maybe not. Bottom line – not having FICO score would limit your choices on what you can rent. It’ll also mean higher insurance bill.

  11. According to my mortgage broker, opening too many credit at a given time provides a reason for each credit company to peek into your credit history, thereby lowers your over all score (for a short term.) (Thus her advice for me not to open any credit card during the mortgage application period.) As long as you maintain good account standing, your credit score will build back up.

  12. Speaking of credit cards (I only use one), my card, “Clear” from american express offers a free credit report AND score (Experian, if I recall correctly). A really useful benefit I would say.

    Does anyone have recommendations for a Visa/Mastercard at the moment. The Chase Freedom (linked from this site) looks good. Just need it for places that don’t accept American Express.

  13. Two things (of many) that suck about the FICO score:

    1. You have to have debt or at least be able to accumulate debt through credit cards to have a good one.

    2. It’s way harder to ruin a good score than it is to bring up a bad score. 30 years of excellent credit can be destroyed by 1 30-day late payment on a credit card.

  14. I have always been curious about one thing in terms of FICO scores and getting a loan: If I have a better score than my wife (a difference of maybe only 20 – 40 points), is it better for me to apply for a loan jointly with my wife? or by myself?

    Meaning, do banks average your FICO to determine your overall risk? Of course another consideration to factor in is the income. If I apply for a loan by myself, can I still list my “household income” as our joint income? Any ideas?

  15. Thanks for the explanation. You give a great explanation about the credit scores.

    When I was trying to cancel an old credit card I never used, the rep convinced me it would hurt my credit score since length of account is important. I tried to research what goes into the score, and your explanation is great.

  16. Ted Valentine says

    Credit score is overrated. If you’re living within your means and financially responsible, it just doesn’t matter to even worry about it.

  17. The Federal Reserve recently published a report to congress on credit scoring that contains some good information relevant to the discussion here. The executive summary and overview are interesting reading for sure, and not too heavy (compared to the body of the report).

    As part of the study, the Fed developed a model using similar techniques to those used in the credit scoring industry. They explained exactly what they did and outlined the variables that ended up in the model. See Table 12 in the report for a summary of the model they ended up with.

    Also of interest is Appendix B, which lists the 312 credit characteristics, built from credit files, that TransUnion supplied for the study. These are the “candidate” variables from which the variables in the FRB model were statistically chosen and are, presumably, similar to the candidate variables used by the credit scoring industry when they develop their own models (think FICO, etc.).

    Warning: it’s really long and the pdf weighs in at 1.84 MB.

    Disclaimer: I worked on the report. With that known, I highly recommend reading it, or at least parts of it, if you want to know more about the way credit scores work.

    @Robert: 1. It’s technically called a credit history score. If you don’t have a credit history, than why would you have a score? This doesn’t mean you have to carry debt, as many people can tell you, but it does mean you have to have been extended credit at some point in your life. 2. You’re right, it’s harder to raise a bad score than to lower a good one, but there’s a good reason for this. Yes, it’s punishing people who screw up, even just once, but that’s exactly the point of the score. Credit scores rank risk, and a large part of the findings in that Fed report are that they rank risk fairly well. And yes, people who have gone bad on an account in the past are MUCH more likely to go bad again in the future than people who haven’t.

    As far as many of the other ideas and questions about how scores are determined in this thread go, I think a quick look at the list of characteristics will help shed some light on at least a lot of what does go into the score.

  18. I just wonder what kind of effect paying off all those zero percent cards has? As I was at the end of 3 different cards zero percent periods, I paid off just shy of $30,000 in balances and it made me think back to when I was financing my car years ago and they noticed that my balances had dropped to zero in the months prior as I paid off my divorce expenses. They actually came back and wanted an explaination as to where that debt went (I had used a bonus to pay it all off). As I am considering moving, I wonder if they will ask the same thing and if it actually messes with my score any or if it’s just the person reviewing the credit history that noticed it?

  19. When I have paid off big chunks of money, nobody called me at all. I did see my credit score go right back up after a month or so, which was very nice.

  20. If I had a nickel for every time someone came to be with a “my mortgage broker said…” story! Sometimes they are right, sometimes they are just perpetuating myths.

    I’m not very familiar with how mortgages affect credit scores, having never had a mortgage or car loan. All I know is that you can have a great score without either one.

    Here’s one simple criteria – if it ain’t on your credit report, it can’t affect your score. That means your race, your bank account accounts, your salary, you occupation. This doesn’t mean it won’t factor into a lending decision, but it won’t affect your score.

  21. great post, and pie chart looks every easy to understand. keep it up. 🙂

  22. Great, easy-to-follow post and very helpful for people who have more than the average number of cards. I like your visuals!

  23. wonderful post

  24. Thanks for all this info…i do have 2 quick questions:

    1. When you say you limit yourself to 3-5 cards per 6 month period does that mean you only open/apply for 3-5 new cards or only possess 3-5 active cards (or do you spread purchases etc, across all 20 or so cards)

    2. Would it not be better to apply for 3-5 cards all at once (within 30 days) as they would only count as 1 inquiry (hard pull) & thus only decrease your credit score by 5 points (as oppossed to 15-25 points), knowing that the 5 point deduction will be regained after 6 months (assuming nothing new & bad…it does bounch back correct?)

    Thanks, you are the man, truly phenomenal post/blog…i was apparentlhy 1 of 3 to email you regarding this yesterday.

  25. Still one may find this kind of information:”Get rid of miscellaneous cards you don’t use. Having too many can hurt your score”. Money, August 2007, p.25 in “The Secret Ingedient”.
    I went to my local bank, and the loan officer advised do NOT close these cards. I monitor the score constantly by Providian and may see that only used capacity influences the score in general, and the new account gives a minor effect.

  26. MJK3 – I only apply to 3-5 new cards each rolling period, depending on what promotions come up. If I need to cancel a card because sometimes an issuer limits you to X number of cards, then I cancel the youngest card. It’s actually hard to get much more than 20. I think Citibank limits you to about 3-4, Chase doesn’t appear to have a limit (think I have 6 or more from them). I definitely cancel any cards with annual fees that I don’t want.

    Most of my cards are stuck in a safebox, and don’t even generate a statement since there is no activity.

    Oleg – Unless I that came from a FICO source, I don’t put much weight on it. That’s why I wrote this post. Sometimes if enough people say it and it sort of makes sense, people start taking it as true.

  27. The number of cards doesn’t matter. I have 41 accounts with a outstanding balance of nearly $100K from 0% balance transfer. That’s a utilization ratio of nearly 50%. When I checked my FICO from Experian two weeks ago, my credit score was 788. I feel what matters most are the length of credit history and payment history.

  28. Kitty,

    Yes I do own my home (paid for).
    I beg to differ with you that the FICO score is a measure of how little debt you have — I have a FICO score of 0 (and have 0 debt). If I had debt, my score would be higher. It is a measure of your debt — your debt score if you will. I know everyone here is a saint when it comes to paying off CC bills each month (although CC defaults and late payments are at a record high). It’s not just the CC’s — how about car loans or other secured debt. Remove the debt (in whatever form) and you will have more money in your posession. I am against all debt (I don’t borrow money), not just CC’s

  29. J.C.,

    Are you saying that you don’t use credit cards??? How do you travel? Hotel reservations, rental cars, airline tickets – all require the use of a credit card. The days of paying in cash are long gone. Just like Kitty, I pay off my credit cards each month so it actually helps my FICO score. I don’t pay a dime of interest and many of my cards actually provide added protection to my purchases. Not to mention, I feel much more safe NOT carrying a lot of money around with me. I’d rather have someone steal my wallet with my credit cards because I can always cancel them in a matter of minutes…compared to not getting the money back that was in my wallet.

    Just a few points to ponder.

  30. Hi
    Thanks for the post.

    How do you keep track of FICO score??

    I heard that there is something real “FICO” score and something “FICO LIKE” Scores mostly called FAKO??

    Which service you use to get the FICE Scores.

    I am not enrolled in any Credit Score Tracking programme but I got one year free credit score tracking from Trans union.
    I do have a Credit card that gives me the Credit Score from Experian.

    my CU to tell me the score and they have my score as ?635? from 1st week of July 2007
    And I looked at my Trans Union point and it is ?755?

    In last one year I have applied for 5-6 CC at the same time (most are from CitiBank) but other than that there is nothing special.

  31. I have a semi-related question about FICO scores and credit reports in general that I’m hoping someone out there will be able to answer. How long after a mortgage is paid off does it continue to affect your credit? My parents paid off theirs over seven years ago. They’ve never checked their FICO, but my mother’s must be pretty good since when she applies for new cards for rewards and discounts, they get good rates and huge credit limits. However, with the changes in how they handle authorized users, my father’s score may plummet. He has one credit card but hasn’t used it in a decade or more since my mother had a card they preferred and he became an authorized user. Does this mean he could end up with a very low score despite being one of the most fiscally responsible people I know or will having had an installment loan continue to boost his score after it has been paid?

  32. Alex,

    I travel, make rental car reservations, hotel reservations, purchase airline tickets — with my debit card. The myth (perpetuated by the CC industry) is that you can’t exist without one. Here is my motto that I try to live by pertaining to my purchases — If I can’t pay cash for it — I don’t buy it — I save up for it and then buy it. I can cancel my debit card just as fast as you can your CC’s.

  33. Debit and Credit cards may look the same, but the laws regulating them are different and your liability for fraudulent charges are higher and notification periods shorter. Forget travel insurance/price guarantees/extended warantee’s too.

  34. Pra Rav,

    Apply for a Providian card. They allow you to monitor your score for free.

  35. How about those frequent flyer miles bonus credit cards? For example the Citibank American Airlines advantage card. It gives 20k bonus miles but has a $85 yearly fee (free for first year).

    Would it hurt your score to cancel one of these sometime within the first year and to reopen the same type of card to obtain the same bonus (if it is even possible to do this and if they will give you the same bonus)?

  36. I looked at the fine print on the Amex Delta card and it specifies that the offer is only available once per person or something to that effect. I wish we could do it more than once, I would be flying free next month instead of needing another 1000 miles.

  37. Hey Jonathan-

    A little off the subject, but I found another great rewards card, its the citi platinum american express card. It can be found on the Thank You network website. Thanks.

  38. ” It?s not just the CC?s ? how about car loans or other secured debt. Remove the debt (in whatever form) and you will have more money in your posession. I am against all debt (I don?t borrow money), not just CC?s”

    J.C. I paid off my mortgage (which is why I asked a question about the effect of paid mortgage on FICO – if someone knows, pls answer, I checked my credit report but not FICO), bought my last couple of new cars for cash, and have over half of my take-home (after full 401K contribution) left every month. You seem to assume that everyone who uses credit card is in debt. CCs are for convenience, and why not get rewards (miles, cashback, extra month in interest) if it doesn’t cost a penny? The other side of the official statistics of 58% of people carrying balances (some of these are simply taking advantage of 0% offers for arbitrage) that 42% pay off their balances in full. This is almost half. I’d venture the people who read this type of blogs are likely to be in the latter 42%. Yet you seem to believe that everyone who uses CC is in debt and is poorer than you. Wanna bet?

    If FICO were about how much debt you have than people who pay their bills in full would’ve had lower FICO when in fact the opposite is true – those who pay their balances in full have better utilization ratio and hence have better FICO. FICO also affects a lot of other things, like what rate you get on your insurance. Some prospective employers check FICO as well. A friend of mine couldn’t even get FNBO Direct savings account opened without FICO – this was right after she married and changed her name and this wasn’t reflected on her credit report.

    Sure, you can cancel your debit card. But what if you don’t notice it is stolen right away e.g. if someone just stole the number? What if someone charges enough to clean up your checking right before other bills are due or are scheduled to be deducted automatically? All the time you are trying to straighten this out your stolen money are gone from your account and you have no access to your money. Whereas with CCs the disputed amount is in “limbo”, so it doesn’t affect you. Same with purchases when you got bad product or something wasn’t delivered: you could stop payment with CC, but with debit card the money are immediately deducted. CCs are a whole lot safer to carry around.


    easy read called “Your Fico Score” by Liz Pullman Weston, kind of explains everything us consumers would want to know

  40. “so I limit myself to about 3-5 credit cards per rolling 6-month period.”

    Out of curiousity, why do you keep signing up for new cards?

    And, if you do so, do you just let the old ones sit around collecting dust? (it seems like that would be and ok solution, not using them but letting them passively help your credit score)

  41. Yes it can hurt alot on your credit. I only use my credit card when its an emergency and I actually have a great strategy I have when it comes to my credit card.

  42. “Out of curiousity, why do you keep signing up for new cards?”

    For profit and more profit. 😉

    “And, if you do so, do you just let the old ones sit around collecting dust? (it seems like that would be and ok solution, not using them but letting them passively help your credit score)”


  43. Pra Rav –

    In response to how to get free credit score – open a Washington Mutual account and manage it online. Your FICO score is there for you – updated monthly.

    I recently borrowed on a 0% offer. When I registered my account online, findiing my score was a nice surprise.

    I also noticed that WaMu is offering a 5% savings acct and a 5% savings acct with free bill pay, free ATM, and free checks, $1 minimum balance.

  44. To Pra Rav-

    What sort of account does one have to open to observe their FICO score for free updated monthly??..savings or does it have to be a credit card…could you provide the link??



  45. I’m pretty sure you need a WaMu credit card.

  46. Hopefully somebody can help me with this question:

    My score dropped quite a bit from opening a few rewards cards accounts and a Best Buy account for a 0% offer. It dropped much more than I anticipated.

    I know that generally closing accounts is a bad idea, but if I close these new accounts, will it improve the average my accounts have been open and then improve my credit score??

    Also, if the answer to the first question is no, how long can I expect it to take for my score to recover from opening the new accounts?


  47. To Answer your question regarding the length of time it will take to raise your FICO score after recently aquiring a few new CC,S is between 30-90 days typically but definitly not over a 6 month period which I have not yet seen as of yet but have only heard of a few instances when it has taken this long.I recently applied for 4-5 cradit cards and watched my score drop from 680 down to about 655 and once again my score has peeked back up and actually has exceeded the 680 I has previously to adding these new credit cards to my credit profile. Hopefully this information was helpful in answering your question to the length of time it takes to raise your credit score back after opening new credit cards.

  48. I have recently gotten my scores from different bureaus and they all have a different scale…Transunion reported a 822 = “B”, 59th percentile (on scale of 501-990); previously i had received an Experian score of 732 “GOOD”, but the Experian scale was a range from 150-930…how does one compare the two, shouldn’t the scale be a constant/consistent range?? Is there not 1 accepted/unified scale for all creditors, i mean i know they all calculate credit differently, but they can’t even keep the scale/range the same??

  49. Jerad Gardner says

    To JC:

    Your goal of being debt free is laudable. However, I agree with most of the other posters that making the most profit from available credit is a good thing. And regardless of balances on any type of account, you are not “in debt” unless you are in the red. Even though you have individual debtors, if you have a positive liquid net worth, and can pay all balances off immediately, I feel that in essence you are not in debt. When I carry $90,000 of 0% “debt” and make around $500/month in interest, I feel I am being the best steward of all available resources, including my credit.

  50. I’ve been reading inquiries from Aug – Nov… I dodn’t notice a reply to Kyle’s Aug question about credit cards offering flyer miles. I have a friend who insists that it won’t hurt a credit score if you sign up for the air miles and then dump the card 11 months later (before the renewal fee is due). Is this true? Can you and your spouse sign up for multiple cards for incentives, and later down the road get rid of them without damaging your score?

  51. anyone know

    I have been paying way excessively more than the mininum (a few hundred at a time) paid off 3 cards (balances were really low $60, $186, $258), my balance is no where near the limit…i checked my fico score through tranunion and every passes OK. I have no late payments, deliquences, or applied for a new card for months. it was going up and then suddenly my score kept dropping and 708-702-700—now it’s 674. I track it through my bank so I don’t get points taken off.

    why! how do i stop this


  53. jennifer:

    Given that your FICO score is in the 400 range believe me when I tell you that is not “good” it is well within the “horrible” range. I think that everyone on this message board is shocked that Chase extended you credit at all not to mention a 0% offer; a $15,000 credit line; AND for 18 months! This would be a great offer for someone that has an exceptional score. Something doesn’t smell right…what is the balance transfer fee assocated with the offer?

    Given your history of bankrupcy and the fact that you are in further financial difficulty right now I would advise you to please not look to credit cards as your answer; even if this is an amazing rate. Focus on spending less paying down debt and overtime your score will slowly increase. Once you have demonstrated to yourself and to the credit reporting agencies that you are financially responsible you could start looking at borrowing debt again.

    Please feel free to post any specific questions you have regarding how to get out of the current situation your are in. I know there are hunderds of people on this message board who would love to help you out.

  54. The balance transfer fee is $5 min up to $75 max per transfer. I find it hard to believe to. Maybe my credit got mixed up with my parents or something. I have the same first name as my moms.

  55. I would bet anything that is the answer. Please to do not take this opportunity to damage your mom’s credit. I’m sure she has worked extrememly hard for it over the years. The last thing you want to do is ruin you mom’s credit.

  56. how many points do they deduct off your credit score if you cancel a credit card

  57. If nobody knows having good credit score on too many credit cards then it is nice to have many. After all, if you pay on time and on schedule, there is no reason you can’t have good credit score wheter you have multiple credit cards. Right?

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