How many cards are you allowed?

Did you know...?

The world record holder has more than a 1,497 credit cards.

(source: Guinness World Records)

There is no limit on how many credit cards you can take out, but the number you have can affect:

  • How much lenders will let you borrow

  • Your credit record, which could stop you getting other cards, loans and mortgages

  • The amount of time you need to spend on managing your cards

How many should you have?

There is no "right" number of credit cards that everyone should have - it depends on your financial circumstances. For some people the number is zero, but others can benefit from holding several cards.

The national average is two credit cards, but if you have more than five it is worth checking if you need all of them.

You can use cards for different purposes, including:

If you have two or more cards that you use for the same purpose, you probably have too many.

The drawbacks of having too many

  • Spending more than you can afford: More cards makes it easier to spend money you do not have, especially if you lose track of how much you have spent. This could lead to debts you struggle to repay, interest charges and other fees.

  • Missing a payment is more likely because it can be harder to manage and keep track of multiple cards. You could be charged fees for missing payments, and you could also end up with a higher interest rate and a damaged credit history.

  • Annual fees or charges for not using a card can still cost you money if your unused cards have them.

  • Theft or other fraudulent use is more likely and harder to notice if you have lots of cards to keep track of.

  • Exclusive offers for new customers will not be available to you if you have kept a card open with the provider.

How will your credit record be affected?

When a lender looks at your application for a loan, mortgage or credit card, they look at your credit history to help decide whether they want to lend to you.

This includes a record of the credit cards you hold and the repayments you have made.

How much difference this makes depends on the lender, as each one has a different idea of who they like to lend to.

If you keep all your cards

The amount of credit available for you to spend is more important to most lenders than the actual number of cards you have.

However, having lots of cards usually gives you a higher total amount you could spend in one go.

This can make lenders worry that you could easily spend beyond what you can afford, especially if your total credit limit comes to a high percentage of your income.

If you cancel your cards

Cancelling as many cards as possible may seem sensible, but it is not always the best approach because lenders also look at the percentage of your credit limit you use.

Most lenders prefer it if the amount you owe is not too high: around 25% of your credit limit is often seen as ideal, and preferably not more than 50%.

For example, if you had five cards that each had a limit of 1,000, your available credit would be 5,000. If you owed 2,000 in total on these cards, you would be using 40% of your credit limit.

If you then cancelled one card, your total credit limit would be 4,000. Your 2,000 balance would then use 50% of it, which looks worse to lenders.

However, using 0% of your credit limit also looks bad to most lenders because they will not be able to see how well you keep up with repayments.

Should you cancel some of your credit cards?

It is worth cancelling cards you never use or that you think are harming your credit record.

Make sure you do not cancel too many at once because this could harm your credit history. Lenders look at how long you keep your accounts open, so closing several will bring this figure down.

Closing too many cards could also leave you without access to funds you might need in an emergency.

Which cards should you keep?

When you want to cancel one or more of your cards, work out which ones are worth keeping. This will depend on how you use your credit cards.

If you always pay your cards off on time, keep the ones that offer you the best incentives for spending like rewards, cashback or air miles.

If you use them to borrow, cancel cards with high interest rates and keep those that offer a low APR or interest free periods.

You should also check for cards with fees, especially if you do not use them enough to get benefits like cashback or air miles.

How to cancel your card

Cutting up the cards you want to cancel is not enough because the account will remain open. This means you could still be charged fees, the card will still show as being open on your credit record and fraudsters could still spend on your card.

Instead you need to pay off the card's balance and then contact your card provider to close your account. This guide to managing your card explains how to make sure you cancel it properly.