Here’s When It’s Smart to Only Have One Credit Card
While there is no magic number of credit cards you can keep in your name, I have repeatedly recommended trying to balance at least two or three of them to improve your personal finances. However, the advice to combine multiple credit cards won’t work for everyone—after all, using a credit card comes with inherent risks—and there are plenty of reasons why you might want to team up with just one card. That’s when having one credit card might be the right move for you.
You can use one credit card to simplify your finances
The more credit cards you have, the harder it is to keep track of repayment terms, benefits, interest rates, and so on. With just one card, it’s much easier to control your spending, make payments on time, and avoid late payments or credit problems. If you have credit card anxiety due to the “all debt is bad” mentality ( which isn’t true! ), or if you’re new to credit management, this simplified approach can reduce stress and help you better manage your credit. finance.
Use one credit card if you’re just starting to build your credit history.
If you’re new to lending or rebuilding your credit score, having just one card can help you build a positive history. Using it for regular expenses and paying it off every month demonstrates that you can handle credit responsibly. Remember: Even an unused credit card with a $0 balance will report positive information to the credit bureaus each month. Then, as you build up your score over time, you can apply for more cards in the future.
Avoid High Annual Credit Card Fees
Multiple cards often mean multiple annual payments. If you’re not getting enough perks and rewards to offset those costs, team up with a card with no annual fee. This will allow you to keep your account open without hefty annual fees. Here’s a calculation of whether your card’s annual fee will be worth it .
Use one card to increase your chances of loan approval
If you need a larger line of credit for a big purchase, having fewer open accounts can improve your chances of getting approved for a new card. Issuers tend to provide less credit to those who already have access to a large amount of available credit across multiple cards.
Use one card to minimize your debt risk
For many people, this is the most important reason to limit yourself to one credit card, and it’s deadly simple: the more access you have to credit, the easier it is to overspend. When you use only one card, you reduce the amount you overspend and also minimize the number of balances you need to keep track of each month. If you have concerns about debt, using one card is safer.
Of course, there are many good reasons to have multiple credit cards, but you should only combine credit cards if you are confident in your ability to always pay off your balance in full and on time every month. In the right circumstances, reducing the number of cards to one can be reasonable. If you’re nervous about accumulating debt, start by letting it run quietly in the background to build your credit score responsibly. Sites like Credit Cards Explained can be helpful resources for finding the cards that best suit your lifestyle .
Ultimately, the best credit card strategy for you is the one that keeps you out of debt. Keep track of due dates, balances, and rewards in a spreadsheet or financial app .