Your credit score doesn’t set the number. InCharge Debt Solutions, a nonprofit credit counselor, says no formula can, so the count comes down to what each card does for you.
More cards can help in two ways. Each one adds its limit to your total available credit, so the same balance takes up a smaller share of it. That share, called utilization, counts heavily in your score. A $1,500 balance uses 30% of $5,000 in limits but only 15% of $10,000. A second card also gives you a way to pay when your main card is lost or frozen for suspected fraud.
Extra cards cost you, too. Each application brings a hard inquiry, a lender’s check of your credit report. FICO says one inquiry takes fewer than five points off most people’s scores, and it stops counting after a year. A new account lowers the average age of your accounts, another factor in your score. And every card adds a due date you could miss. Payment history makes up 35% of a FICO score, more than any other factor.
So test a new card before you apply. Use your last three months of statements to estimate what it would earn in a year, subtract any annual fee, and compare that with what your current cards earn on the same purchases. The gain is often smaller than the offer suggests. If a no-fee card pays 3% on groceries where yours pays 2%, moving $500 a month of groceries to it adds $60 a year.
If you want another card for rewards, pairing a category card with a flat-rate card usually pays best. Filling a real gap counts too, like getting a card with no foreign transaction fee before you travel abroad.
None of this means closing cards to get down to two or three. An old no-fee card usually does more good open than closed, because its limit keeps your utilization down.
When the next card offer arrives, name the job it would do that your current cards don’t. Skip any card with no new job to do.
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