There are some people who use one credit card for everything, and there are others on the opposite end of the spectrum who hold a dozen — or more — open credit lines. Most people fall somewhere in between. Experian found that in 2020, the average American held three credit cards.
So, can you have more than one credit card? Yes. But the better question is: Should you have more than one? And should the credit cards be from the same bank or different ones?
Here’s what you need to know to decide for yourself.
Should you have more than one credit card?
For many people, the answer is yes. If your credit scores are in good enough shape to get approved for another card, and you use credit responsibly, there are several advantages to having multiple credit cards:
It can help your credit score: Using multiple lines of credit can help your credit score, if you make payments on time and in full and don’t max out your card.
You could earn more rewards: Oftentimes, credit cards will reward new applicants who meet certain initial spending requirements with a nice sign-up bonus. Plus, some cards earn high rewards in certain categories, while others earn better rewards in different spending categories. Coupling your cards and using them strategically can yield higher rewards on everyday purchases. For example:
NerdWallet rating Apply Now Read Review | ← Use the Discover it® Cash Back to get 5% cash back in rotating categories that you activate (on up to $1,500 in spending each quarter). → Use the Citi Double Cash® Card on other purchases. It earns a flat 2% cash back on everything — 1% when you make a purchase and 1% when you pay it off. | NerdWallet rating Apply Now Read Review |
NerdWallet rating Apply Now Read Review | ← Use the Blue Cash Preferred® Card from American Express to get 6% cash back at U.S. supermarkets (on up to $6,000 a year in spending), 6% on select streaming subscriptions, and 3% at U.S. gas stations and on transit. Terms apply ( see rates and fees ). → Use the Wells Fargo Active Cash® Card on other purchases. It earns a 2% cash back on all purchases. | NerdWallet rating Apply Now Read Review |
Different cards offer different perks: Having multiple cards could get you access to perks you couldn't get with just one. If you’re a Hyatt hotel fan, for example, the World of Hyatt Credit Card can be a great choice, since it offers a free night certificate, automatic elite status and more. But it won’t offer the travel protections you’ll find on the Chase Sapphire Preferred® Card, nor will it insure your cell phone like the U.S. Bank Visa® Platinum Card.
» MORE: What is a good credit score? How do I get a good credit score?
» MORE: How to make the most of rewards credit cards
🤓Nerdy Tip
Most banks have restrictions on how many credit cards you can have and still be approved. Chase has a “5/24 rule” that limits the number of cards you can open in a two-year period, across any issuer. American Express has a “once per lifetime” rule that prohibits you from getting another bonus on the same credit card. Citi only allows you to earn one welcome bonus per card every 48 months.
Should they be from the same bank?
If you’re thinking about adding another credit card to your wallet, it’s not only possible to have two credit cards from the same bank, but it can also be preferable.
That said, there are a few cons worth considering, too.
Advantages of sticking with one bank
Here are some advantages of having multiple credit cards from the same bank:
Keeps things simple: When your finances live under the same roof, they can be easier to keep track of. You can log in to one place and pay your bills with just a few clicks rather than keeping track of multiple logins and learning separate banking interfaces.
You may be able to pool points: Some banks issue credit cards that complement each other as part of the same family and allow you to combine points. For example, if you have a Chase Freedom Flex℠ as well as a Chase Sapphire Reserve®, you can combine your points and get the 50% uplift that the Chase Sapphire Reserve® offers when redeemed for travel through the Chase portal.
Potential for relationship rewards: Many credit cards feature a bonus to entice new applicants. But banks that issue credit cards aren’t thrilled to acquire fly-by-night customers in the process. They prefer to build long-lasting relationships with cardholders, and some banks will give extra rewards to customers with multiple accounts. Bank of America®, for example, has a Preferred Rewards program that allows some customers the chance to earn 25%-75% more points on multiple credit cards if they also have an eligible bank account with enough funds.
» MORE: Is credit card loyalty a virtue?
🤓Nerdy Tip
Every time you submit an application, an inquiry into your credit history is made, which shaves off several points from your credit score. As such, apply for a second credit card only if you think your chances of approval are realistic.
Disadvantages of sticking with one bank
Here are some downsides to having multiple cards with the same bank, and why you might consider branching out to another credit card issuer:
Fear of missing out could be real: Each bank operates in different ways and offers different credit card products. If you’re committed to using credit cards only from one bank, you could be missing out on some better credit card rewards or perks that may be a good fit for you.
No balance transfers: If you’d like to take advantage of a 0% balance transfer offer, you won’t be able to use the same bank. Most banks use balance transfer offers to entice new customers and prohibit transferring balances between cards that they issue.
Credit missteps could be more glaring: If you have a history of missing payments or maxing out your credit card, you may want to think twice about getting a second card from the same bank. Repeatedly missing payments on just one of your two cards from the same bank could result in an increased annual percentage rate or reduced credit on both pieces of plastic.
What’s next
How to stay organized when you have multiple credit cards
I'm a seasoned financial expert with extensive knowledge in credit management and personal finance. My expertise is grounded in years of hands-on experience, keeping abreast of industry trends, and offering practical advice on credit-related matters. Now, let's delve into the concepts discussed in the article:
Having Multiple Credit Cards:
1. Credit Score Impact:
- Expert Insight: Utilizing multiple credit cards responsibly can positively impact your credit score.
- Evidence: Making timely payments, avoiding maxing out cards, and managing credit responsibly contribute to a better credit score.
2. Rewards Accumulation:
- Expert Insight: Owning multiple cards allows for strategic use to maximize rewards.
- Evidence: The article provides examples of using different cards for specific spending categories, showcasing how this approach can yield higher rewards.
3. Card Perks and Benefits:
- Expert Insight: Different cards offer various perks; having multiple cards broadens access to diverse benefits.
- Evidence: The article mentions examples such as travel protections on the Chase Sapphire Preferred® Card and cellphone insurance on the U.S. Bank Visa® Platinum Card.
Considerations for Multiple Cards:
1. Bank Restrictions:
- Expert Insight: Many banks impose limitations on the number of credit cards you can have.
- Evidence: The article mentions Chase's "5/24 rule" and American Express's "once per lifetime" rule, highlighting the importance of understanding each bank's policies.
2. Same Bank vs. Different Banks:
- Expert Insight: While having cards from the same bank can be advantageous, there are both pros and cons.
- Evidence: The article outlines advantages like simplicity, point pooling, and potential relationship rewards. It also discusses downsides, such as missing out on better rewards from other banks.
Advantages of Same Bank Cards:
1. Simplicity:
- Expert Insight: Managing finances under one bank can simplify bill payment and account tracking.
- Evidence: The article highlights the convenience of a unified financial interface.
2. Point Pooling:
- Expert Insight: Some banks allow combining points from different cards within their portfolio.
- Evidence: The article provides an example using Chase Freedom Flex℠ and Chase Sapphire Reserve® to illustrate point combination.
3. Relationship Rewards:
- Expert Insight: Banks may offer extra rewards for customers with multiple accounts.
- Evidence: The article mentions Bank of America's Preferred Rewards program, which provides additional benefits for customers with multiple accounts.
Disadvantages of Same Bank Cards:
1. Fear of Missing Out (FOMO):
- Expert Insight: Limiting yourself to one bank may result in missing out on better credit card offers.
- Evidence: The article suggests that different banks offer varied products and rewards.
2. No Balance Transfer Options:
- Expert Insight: Using the same bank for multiple cards may limit balance transfer options.
- Evidence: The article points out that most banks restrict balance transfers between their own cards.
3. Credit Missteps:
- Expert Insight: Repeated credit missteps could have more significant consequences with multiple cards from the same bank.
- Evidence: The article warns about the potential impact on interest rates and credit limits in case of payment issues.
In conclusion, my expertise underscores the importance of strategic credit card use, understanding bank policies, and evaluating the advantages and disadvantages of holding multiple credit cards.
