Does Having Two Credit Cards Help Build Credit Faster?

Using a student or secured credit card is a common first step toward building credit, but card owners will want to graduate to a new, unsecured card after building up credit. This step can be a little intimidating if you’re new to credit as it invites new questions, like: Does having multiple credit cards hurt your credit or help it?

While having more credit cards can help increase your credit score, a more reliable strategy is to focus on responsible financial habits and card management. Making on-time payments and keeping your credit card balances low is the most impactful practice for building credit over the long run.

Here’s what you need to know about how having two or more credit cards can affect your credit.

What makes up a credit score?

Your credit score calculation is based on several factors, including:

• Payment history — 35 percent: Making on-time payments is the most important factor for your credit score, even if you’re only able to make the minimum payment.

• Credit utilization — 30 percent: Credit utilization is the amount of credit you use versus the amount available to you. Many experts suggest keeping this number below 30 percent. For example, if you have a single card with a $1,000 credit limit, try to keep your outstanding balance below $300 — and pay it off as soon as you can.

• Length of credit history — 15 percent: Credit history simply refers to how long credit has been extended to you. In general, a longer credit history is favorable to a shorter history.

• Credit mix — 10 percent: This refers to the different types of credit accounts you have, such as revolving debt (like credit cards) and installment debt (such as a mortgage or personal loan). Don’t feel pressured to take out a loan if you don’t have one, however, since having credit cards alone can still help you build a solid credit score.

• New credit — 10 percent: This piece of your credit score considers how often you apply for new credit. Having too many new credit requests can hurt your credit score, so waiting three to six months between credit card applications is advised.

Understanding how those factors influence your score can help you decide if carrying more than one card might have a positive impact.

How does having multiple cards affect your credit score?

Having multiple credit cards can impact your credit score both positively and negatively, which is why you should carefully consider all aspects before making your decision.

Positive impacts of having multiple cards

Having more credit cards can increase your credit score and improve your financial health in a few ways:

• May improve your credit utilization ratio. Having multiple cards means your credit utilization may decrease, assuming you maintain your typical level of spending. Because you’re being extended more credit, you’re (hopefully) using less of your overall credit limit — provided you keep your balances low. Because credit utilization is such a major factor in your credit score, lowering your overall credit usage could provide your score with a nice boost.

• Provides more financial wiggle room. Carrying more than one credit card gives you a larger financial cushion. If an emergency arises and you need to use a credit card, having more than one card provides additional options and greater access to credit.

• More perks and benefits. Using multiple credit cards can let you take advantage of perks and benefits that a single card may not offer. This may include things like added travel protections, no foreign transaction fees or a lengthy 0 percent introductory APR on purchases or balance transfers. If your cards earn cash back, points or miles, using your cards strategically can help maximize your rewards haul.

Possible negative impacts of having multiple cards

While it can offer many advantages, there can also be risks involved with taking on multiple credit cards:

• Credit dings from too many applications. Applying for a credit card typically involves lenders making a hard inquiry on your credit report. This can temporarily decrease your score by a few points. Although the effect may seem relatively insignificant, if you’re trying to secure a mortgage or new loan, a decrease of just a few points could mean poorer rates and terms.
• Spending temptation. While not a direct impact of having a second card, adding another card to your wallet could also encourage you to spend beyond your means and possibly take on debt. Not being able to pay off the debt in a timely fashion can have major consequences for your financial health and your credit score. Additionally, carrying too much debt on your cards can increase your credit utilization ratio — which can hurt your credit score.
• Can complicate your finances. Having multiple credit cards requires you to stay extremely organized and vigilant. You’ll need to keep track of multiple balances, due dates and more. Being late or missing payments can cause your credit score to fall, while taking on too much debt can also have negative effects on your credit score and your overall financial health.

Should you have multiple credit cards?

The potential benefits of having an additional card often outweigh the drawbacks. When used responsibly, many cards can be a great addition to your financial toolbox — offering rewards or benefits that can protect your purchases and help you save money over the long run.

For example, the Wells Fargo Active Cash® Card offers 2 percent cash rewards on all purchases, a welcome bonus of $200 in cash rewards (after making $500 in purchases during the first three months) and other practical perks like cellphone protection (terms and deductibles apply).

Remember, not all credit cards are right for every purchase, and pairing credit cards with different benefits can make the most of having multiple cards. For example, a card like the Wells Fargo Active Cash charges a 3 percent foreign currency conversion fee, whereas the Chase Sapphire Preferred® Card comes with no foreign transaction fees and a slew of important travel protections — like trip cancellation insurance, trip interruption insurance, trip delay reimbursement and more.

Having another credit card may help you with other financial goals, too. If you’re planning on making a major purchase or are having trouble paying off a credit card balance, using a card with a 0 percent introductory APR on balance transfers or purchases can be a way to avoid costly interest charges. Many of the best balance transfer cards come with introductory offers ranging from 12 to 21 months — although they often require a good to excellent credit score to qualify.

How many credit cards is too many?

There isn’t a specific number of cards that are “too many.” It comes down to how many cards you can manage in your wallet without becoming overwhelmed and missing payments. For some people, this number might be as little as two cards. Others can juggle up to eight or nine cards with no issue.

So long as you can keep track of your cards and continue to make your payments, you can open as many cards as you feel comfortable. Two to three cards is a nice sweet spot: this number will increase your overall credit limit and can help reduce your credit utilization ratio, which may positively impact your credit score. And you can choose reward cards that cover a few different categories, which helps earn you earn cash back, points or miles on your purchases.

Steps to take to increase your credit

Although having multiple credit cards can help increase your credit score, it is far from guaranteed. As overwhelming as building credit may feel, one of the best ways to positively impact your credit is to stay focused on good financial habits rather than worrying about how many cards you have.

Instead of attempting quick fixes, try following some concrete steps that can help build your credit and improve your overall financial health, including:

1. Make on-time payments: Paying your bills on time is the most important factor considered in your credit score. Focus on paying your bills on time, and an increase in your credit score is sure to follow.

2. Keep credit card balances low: Credit utilization is the second most important credit score factor. By keeping your credit card balances low (or paid off), you decrease your credit utilization and increase your credit score.

3. Spread out credit applications: Avoid applying for multiple credit cards or loans in a short period of time. Too many applications within a short time frame can temporarily lower your credit score. Once you’ve applied for credit, it is best to avoid making another credit application for three to six months.

4. Become an authorized user: If you have a limited credit history, becoming an authorized user on a trusted friend or relative’s credit card can help you start building credit.

5. Consider using other services: There are other ways you can increase your credit score, too. Services like Experian Boost allow your on-time utility bill payments to show up on your credit report and can quickly improve your credit score if you’ve maintained a good payment history.

The bottom line

So, is it good to have multiple credit cards, and does having more credit cards increase your credit score? That depends on how you use them. To make the greatest impact on your credit score, the most important thing you can do is focus on practicing responsible financial habits.

However, if the benefits of having an additional credit card help you achieve your other financial goals, such as a potential long-term credit score boost, access to additional travel and purchase protections or earning a greater amount of rewards, then it may be worth carrying multiple cards.