For the average American, credit cards have become a necessity. With so many available credit options, it’s easy to consider every offer that comes your way.

But as a cardholder, is it good to have multiple credit cards? Let’s review the basics of how credit cards work to discover whether carrying multiple credit cards makes financial sense.

What are credit cards and how do they work?

Credit cards can be powerful tools when it comes to building your credit history and personal finances. After all, they can offer convenience, rewards, and the opportunity to establish a good credit score.

Issued by a bank, business, or other financial institution, credit cards allow cardholders to borrow money or make purchases on a line of credit. The cardholder then pays back the borrowed funds plus interest and fees, as specified in the credit card agreement.

Before submitting a credit card application, it’s crucial to understand the essential terms and conditions of any card, including interest rates, credit limits, rewards programs, and fees.

Interest rates

Often referred to as annual percentage rate (APR), interest rates represent the amount of money charged on any balance that is not paid in full each month. APRs can be fixed or variable.

Fixed APRs typically stay consistent with rates set by the Federal Reserve, while variable APRs can change based on market conditions or other factors set by your credit card issuer. Most cards have variable APRs.

Some cards also have introductory rates, which may be lower than the regular APR for a short period of time. In addition, most credit cards have a grace period during which no interest is charged on new purchases, so long as the due amount is paid in full by the listed due date.

Once the grace period ends, however, any unpaid balance will begin accruing interest at the stated APR.

Credit limits

These determine how much money your lender will let you borrow at any given time. Your credit limit is based on a number of factors, including your credit score, income, and debts.

Keep in mind that maxing out your credit limit on a regular basis can negatively impact your credit score. For a higher credit limit, you can request an increase from your credit card issuer.

Rewards programs

Some credit cards come with rewards, such as cashback or travel perks, where you can earn points or miles for the purchases you make with your card. For example, some rewards credit cards may offer a bonus for spending in certain categories like groceries or gas.

Others may limit how many points or miles you can earn in a month or year. Additionally, some rewards programs are tied to specific brands, such as airline or hotel loyalty programs. These can be convenient if you often travel using the same airline or staying at the same family of hotels.


Credit cards can also come with a variety of fees, such as an annual fee. These are charged by credit card issuers to help them maintain the account.

Here are some notable annual fees for popular credit cards:

  • American Express Platinum Card: $695
  • Chase Sapphire Reserve: $550
  • Vital Card: $99
  • Capital One Venture X Rewards: $395

Other common fees include foreign transaction fees, balance transfer fees, and cash advance fees. These apply when the cardholder makes a purchase or transaction in a foreign currency, transfers a balance from another credit card, or takes out a cash advance.

What are the different types of credit cards?

Consumers can choose from a vast selection of different credit cards, from secured cards to store credit cards. Every card offers its own distinct set of perks, as well.

Common types of credit cards include:

  • Cash back cards: These cards give a percentage of your purchase price back in the form of cash. For instance, if you spend $100 on a cash-back credit card offering a 1.5% reward, such as Vital Card, you would receive $1.50 back.
  • Business credit cards: Designed for business owners, these cards offer special perks such as free employee cards and discounts on operational expenses like shipping.
  • Travel credit cards: Cardholders can earn points or miles with these cards and redeem them for travel rewards like airline tickets, hotel stays, car rentals, cruises, and more.
  • Store credit cards: Often offered by department stores and other retailers, these store-branded cards allow customers to earn exclusive discounts or rewards when shopping at their favorite retailers.

In addition, secured cards are credit cards that require a security deposit before use. These are typically designed for people who either have bad credit or are new to using credit. Secured cards may also offer a lower credit limit compared to unsecured cards.

Is it good to have multiple credit cards?

Cardholders can take advantage of several benefits by carrying two or more credit cards. With multiple credit cards, you can participate in different rewards programs to earn more points, miles, or cash back on your purchases.

For example, if you have one card that offers 2% cash back on all purchases and another card that offers 5% cash back on restaurants, you can use the latter card for restaurant purchases to maximize your rewards earnings.

Not to mention, you can manage your personal finances more efficiently by using different cards for specific expenses. Designate one card for everyday purchases like public transit or home utilities and another for larger items or bills to stay within your budget and avoid overspending. If you use a Vital Card, you can even set spending thresholds for yourself and have alerts sent automatically any time you spend above that limit.

Plus, owning more than one credit card can actually help improve your credit score in the long run. This is because credit card accounts rely on revolving credit.

A healthy credit mix can include both installment loans and revolving lines of credit, which could prove beneficial to your credit score. Installment loans, such as auto loans or mortgages, show lenders that you can handle making regular payments over a period of time.

On the other hand, revolving lines of credit, such as credit cards, show lenders that you can manage your debt and make timely payments. As a result, using multiple credit cards can help you effectively diversify your overall credit mix.

What influencing factors affect your credit score?

The three major credit bureaus (i.e., Experian, Equifax, and TransUnion) consider multiple factors when calculating credit scores.

These include:

  • Credit utilization: the amount of debt you owe compared to the borrowing limits you’re currently using.
  • Payment history: the regularity of your payments across all of your credit accounts, as well as the history of late payments.
  • Credit history: the length of your credit history.
  • Credit inquiries: the number of recent credit inquiries on your credit report.

Keep in mind that it’s crucial to pay off your credit card bills on time each month to maintain your financial health and reap the benefits of carrying multiple credit cards. Otherwise, late monthly payments and accruing interest on outstanding credit card balances may damage your credit score over time.

What are the downsides of owning multiple credit cards?

While having two or more credit cards can provide you with financial flexibility, there are also some potential downsides to consider. One of the primary drawbacks is that it can be tempting to max out all of your cards if you have a lot of available credit, which can lead to credit card debt.

Additionally, having too many credit cards and paying just the minimum payment amount each month can hurt your credit score. Making only the minimum monthly payments can also cause interest charges to snowball into overwhelming credit card debt.

Not to mention, opening a lot of new credit card accounts at one time may temporarily lower your score due to hard inquiries on your credit report.

How to use credit cards in a responsible way

While having many credit cards may give you more spending power, it also means having more responsibility. There’s more to keep track of, such as payment due dates, annual fees, and interest rates.

Here are some tips that can help you develop healthy credit habits:

  • Become familiar with your spending habits and set limits to prevent overspending.
  • Make sure you have enough income to cover all of your debts.
  • Pay your credit card statements on time and in full each month.
  • Keep your balances low relative to your credit limits in order to optimize your credit utilization.
  • Monitor your monthly statements for accuracy and sign up for notifications regarding activity and changes on the accounts.

Credit cards can provide convenience and financial peace of mind in certain situations — but when used the wrong way, they can become overwhelming. It’s best to practice good financial habits when it comes to owning more than one credit account.

The bottom line on owning more than one credit card

So, is it good to have multiple credit cards? Ultimately, that depends on your unique financial situation.

Ask yourself if you can keep up with two or more credit card payments each month, without fail. If not, it’s probably best to stick with just one card.

Also, think about what you’ll use each credit card for. Will it be for emergency expenses only? Or will you be using it regularly to earn rewards points? Knowing how you’ll use each of your credit cards can help you spend responsibly.

Lastly, consider the impact another credit card will have on your credit score. If you’re diligent about making all your monthly payments on time and keeping your credit utilization rate low, an additional credit card can actually boost your score by increasing your available credit.

Here at Vital, we understand the importance of building healthy financial habits. That’s why Vital Card offers cash incentives for sharing and spending responsibly, as well as easy access to your credit score. Learn more to see if Vital Card is right for you.


How often can the bank change the rate on my credit card account? |

Comparing Credit, Charge, Secured Credit, Debit, or Prepaid Cards | Consumer Advice

What is a Credit Utilization Rate? | Experian

3 Bureau Credit Reports and Scores | Experian

Assess your spending | Consumer Financial Protection Bureau

Best Credit Cards Of March 2023 | Forbes Advisor

Vital Card blog posts are intended for informational purposes only and should not be considered financial or any other type of advice.