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Multiple credit cards

How many credit cards can you have?

Credit cards can be handy to manage your finances, but is it a good idea to have more than one and will it damage your credit rating?

By Jessica Bown

Published: 20 October 2020

Couple making credit card application

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There isn’t a limit to the number of credit cards you can have. Credit cards can help you manage your finances in a number of ways and show lenders that you can handle credit. Used correctly, your credit rating won’t be negatively affected and may even improve. However, each card should have a purpose and be used responsibly. Otherwise you just run the risk of racking up more debt and your credit score will be damaged.

Why would I want more than one credit card?

Used wisely, credit cards can be handy in saving you money. For example, if you’re already paying interest on one credit card, transferring the outstanding balance to a new 0% balance transfer card could reduce your monthly interest payments.

Having more than one credit card can also be a good way to manage your spending. You could use one card for the weekly shop, for example, and have a specialist travel credit card for when you make trips abroad.

While having more credit cards can give you access to more credit too, you’ll still have to pay it all off eventually. You’ll also have to manage each card, making sure you don’t miss any payments every month. You can set up direct debits and alerts to make this easier, but it is still additional admin for you to keep on top of. However, the biggest risk of having more cards at your disposal is the temptation to rack up a lot of debt.

How many credit card transactions are there each year?

Data supplied by UK Finance, correct as of May 2020

Does more than one credit card affect your credit rating?

The effect on your credit rating depends on how well you handle your cards. If you regularly miss payments or max out your credit limits, then it’s likely to damage your credit score.

But if you use each card responsibly, paying off the balance on time every month, it will give banks confidence that you can handle credit.

Having multiple credit cards and using a smaller portion of the credit limit on each can also boost your credit score if you’re smart. Consider having two credit cards with a balance of £500 on each versus a single card with a £1,000 balance.

In this example, having two cards means you use less of your available credit, a technique known as ‘debt utilisation’, and banks view this as acting responsibly.

On the other hand, making multiple rejected applications for credit cards can harm your credit score because it makes it look like you are in desperate need of money.

How do balance transfer credit cards work?

Monthly interest payments can really mount up if you have outstanding debt on several credit cards, and for some people these repayments can become a problem.

Balance transfer credit cards are a useful way to consolidate your debts into one place, hopefully reducing the overall amount you have to repay and simplifying your monthly admin.

When you take out a balance transfer card, you have a window of time to move your debts onto it. This can interest-free, though some cards charge a small amount of interest and a percentage fee of the balance you are transferring.

This effectively buys you time: rather than paying off the interest that has accrued on your other cards, you pay off the outstanding balance instead. Some balance transfer cards offer interest-free periods of up to three years.

Can I apply for a balance transfer card without affecting my credit score?

You should only apply for a credit card when you feel it would be beneficial and try not to make too many applications over a short period, as rejections can affect your credit score.

However, many balance transfer cards are designed for people who don’t have spotless credit, and you may find you are eligible for one.

Our eligibility checker is a quick and easy way to find you the right credit card without affecting your credit score. It uses what’s known as a ‘soft search’, which isn’t recorded in your credit file.

It will only show you the cards you are most likely to be accepted for, reducing the risk of rejection damaging your credit score.

Compare credit card deals

If you’re looking to apply for a credit card, make sure you get the best correct card for you at the best rate possible by comparing deals with MoneySuperMarket.