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Credit Cards - How many is too many?

I've recently got one credit card to rebuild my credit after two defaults a few years ago. I'm amazed to see it's doing wonders to my credit already just a few months in as I pay back each month. Is it wise to get another to essentially double the speed of rebuilding my credit? Also, is it ok to get another so soon after getting the other in august / september?

Also, how many cards is too many? I saw on a previous forum post 8 years ago on here that said as long as available credit is not more than 50% of your salary. Do they mean yearly salary?

Comments

  • I would give it 6-12 months before applying for another. There was a reason you defaulted in the past and you need to learn self-discipline to avoid that again so baby steps are best here.

    if and when you decide to take out another CC, make sure it’s working best for you (I.e. cashback/rewards/0% on purchases), always use eligibility checker on the lenders own website first.
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  • WillPS
    WillPS Posts: 4,370 Forumite
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    There are no definitive answers to your questions. Your credit is not a 2D thing which uniformly increases or decreases, so get the idea of another card "doubling the speed" of your credit worthiness improvement out of your head.

    I certainly wouldn't be worried about having more than 1 card on my profile, and searches drop off after 1 year so that's nothing to worry about if long term credit worthiness improvement is your aim.

    If this other card will bring you some advantage over and above your existing one (i.e. rewards - Asda and Tesco have rewards offerings aimed at those 'rebuilding'), I'd say go for it. If your existing limit is sufficient and you'd get no extra benefit, just keep on doing what you're doing I'd say.

    In terms of a limit relative to your salary, again there is no uniform rules; different lenders will have different thresholds which they are comfortable lending with. Aim to have a sensible amount of total credit to meet your needs, but not more.
  • blue.peter
    blue.peter Posts: 1,321 Forumite
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    Also, how many cards is too many? I saw on a previous forum post 8 years ago on here that said as long as available credit is not more than 50% of your salary. Do they mean yearly salary?
    That's the first time I've heard that one. A year or two ago, I had six cards with a total credit limit of about 150% of my gross yearly income. (No, I never got anywhere near to using it all - I've always paid my cards off in full every month.) Since then, I've cut down to four cards (total credit limit about 2/3 gross yearly income), and will soon be cutting down to three cards. As far as I'm concerned, one Visa and one MasterCard is enough provided only that the credit limit is enough for one's needs. Cards simply accumulated as I applied for new ones with attractive cashback offers and didn't drop them when the cashback was reduced/stopped. I'm now making a conscious effort to simplify my wallet a bit.

    I agree with the poster above: if you've had problems in the past, make sure that everything's under control before applying for more credit. Don't rush into anything. Credit cards are a good servant, but a poor master. Don't let them get on top of you. Think about how much credit limit you need to cover your spending habits and eventually get yourself into the position where your actual credit limit is about double that - having unused credit looks good because it shows potential lenders that you're not desperate. Always, always pay your card(s) off in full every month.

  • Nebulous2
    Nebulous2 Posts: 5,369 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I've had in excess of my yearly income in credit card limits for at least 20 years. At times I've had more than twice my income. 

    I'm retired with limited need for credit cards, no balances, and have just had a card closed due to lack of use. 
  • phillw
    phillw Posts: 5,630 Forumite
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    edited 13 November 2022 at 11:07AM
    Also, how many cards is too many? I saw on a previous forum post 8 years ago on here that said as long as available credit is not more than 50% of your salary. Do they mean yearly salary?
    My combined credit limit is way higher than my salary. I have half a dozen credit cards and recently got a Barclays platinum. My income is not high by any stretch of the imagination.

    I was using most of the credit cards just for direct debits, but they are becoming less useful & spending on them once a month to keep it going has become more of a pain.


  • tacpot12
    tacpot12 Posts: 8,670 Forumite
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    I can't see much reason for having more than 4 cards, providing the combined credit limit is above what you are every likely to need or be able to use safely.

     Like many others who have posted, I have a credit limit total that is above my annual income. In my case it's nearly double, and I will be spending about 50% of my income this year via credit cards, but I have saved up for the expenditure, so the cards will get paid off within 30 days. 
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • fergie_
    fergie_ Posts: 215 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Its not just credit available, but how you utilise it. Having 10k debt, but 100k limit can look a lot better than having 5k debt with a 7k limit.
  • I've had over 10 cards at a time [I was lazy about closing them] and about 4 times my annual income in credit limits [never gone anywhere near]
    Currently got 6, total limit about twice my annual income.
    Too many is if it bothers you, I reckon
  • Alex9384
    Alex9384 Posts: 962 Forumite
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    I had 7 credit card + 1 charge card at one point and still was eligible for other cards. Currently have 6 credit cards.
    I'm on a relatively low income and my combined limits are roughly double of my gross annual income. I'm still eligible for most credit cards except MBNA and Santander (who always ask how many cards I have). The problem was when I had high utilisation on 2 of those cards (even though they were on 0% rate), that seems to scare other lenders.
     
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