It’s Fine to Have a Lot of Credit Cards

I have 13 credit cards. That sounds like a lot, even to me. But it’s fine to have a lot of credit cards. In fact, when you understand how credit scores work, you may decide to add more cards to your wallet.

The Impact To Your Credit Score

Your FICO credit score is based on a number of factors. Some have a high impact on your score, like late payments. Others, not so much. The amount of credit made available to you (i.e., by having a lot of credit cards) is not one you need to worry about. It has very little impact.

On the other hand, credit utilization has a big impact on your FICO credit score. What’s credit utilization? It’s how much of your available credit you’re using. For instance, let’s say you have $50,000 of available credit from 5 credit cards, and you currently owe $2000. Your credit utilization is just four percent. That’s excellent.

Now, imagine that your available credit goes to $100,000. Maybe you added a few more credit cards. If you owe $2000, your utilization is just two percent. Even better!

It’s best to keep your credit utilization below 30%, because a card issuer will translate higher utilization to financial trouble, and worry about your ability to pay. The lower your credit utilization, the better.

When you apply for a credit card, the bank will usually make a hard inquiry — a credit check. That has a low impact on your credit score, but not zero impact. You don’t want to do it too often. But once you’re approved for a new credit card, your score should bounce back rather quickly.

What to Consider When Applying for Credit Cards

The best travel reward cards will almost always have an annual fee. That’s not a problem, provided you get good value from the card. Of my 13 credit cards, only one has no annual fee. But before applying, take a hard look at the costs and benefits of the card. Will you actually use the benefits offered? If you never fly United, for example, there is no point in having a United credit card.

I also don’t recommend getting a card unless you intend to keep it. In other words, the long term benefits should be worthwhile to you. As I’ve mentioned in my Ten Commandments of Travel Rewards post, credit card issuers are increasingly cracking down on people who game the system to get a big welcome bonus and then cancel the card. The bank may let you get away with it, but they will also keep track of your behavior. And at some point, you may be denied the card you want.

Since I started collecting points and miles, I have never been turned down for a card. Never! I pay the annual fee and pay my bills in full each month, and I keep the cards for which I apply. That’s not to say you should never cancel a card. Sometimes that’s exactly what you should do, such as when the card’s benefits no longer outweigh the annual fee.

Putting a Value On Each Of My 13 Credit Cards

But as long as you can pay the bills in full each month, it’s fine to have a lot of credit cards. There really isn’t such a thing as too many, unless they don’t provide value.

I don’t plan to stop at 13 credit cards. I have yet to apply for a card that earns American Express Membership Rewards points, and I’d like to have one in my wallet.

Each of my cards gives me value in return for the annual fee. And at least once a year, you should confirm that the benefits of your cards outweigh the costs. I’ll give an example, by looking at each of my 13 credit cards. I won’t include the welcome bonus for new cardholders here, nor will I include benefits like trip protection. Both are important considerations when applying for a card and making purchases, respectively. But when comparing the straight up cost of a card to its benefits, it’s better (and easier) to weigh only the most tangible benefits.

Chase Sapphire Reserve Card

Annual Fee: $550 (partially offset by an annual $300 travel credit)

Despite the eye-popping annual fee, I use the Chase Sapphire Reserve Card more than any other card in my wallet. The card earns Chase Ultimate Rewards points, a flexible rewards currency that can be exchanged on a 1:1 basis with three hotel partners, including World of Hyatt and 10 airline partners. The card offers 3x points on travel and restaurants worldwide; and with the amount I spend on these two categories, I get a solid return.

If you book travel through Chase’s portal, every point is worth 1.5 cents. Let’s say you spend $10,300 with the card each year on restaurants and travel. That would break down as follows:

• $300 — Reimbursed via the travel credit (assuming a minimum $300 on travel purchases, none of which earn Chase Ultimate Rewards Points).
• $10,000 — Earns 3x points per dollar, or 30,000 points.
• Those 30k points can be redeemed for a minimum of $450 in travel.

That $300 annual travel credit effectively lowers the annual fee to $250. Chase has a fairly broad definition of travel, and even grabbing a Lyft (my preference) qualifies.

Bottom Line: The Chase Sapphire Reserve (CSR) card is a good value. But it’s not a card you can put away in your sock drawer and forget about. As a premium travel card, it only has value if you spend on travel and restaurants. In my example, a $10,300 annual spend is worth a minimum of $450 in travel. Add in the $300 travel credit, and that’s a $750 value, all for a $550 annual fee.

The CSR has other temporary benefits that can add to its value, at least for the next year or more:

• A temporary $60 Door Dash reimbursement in both 2020 and 2021
• One free year of Lyft Pink, a loyalty program offering 15% discounts on all Lyft rides.
• 10x points on all Lyft rides through March 2022 (the normal 3x points, plus an additional 7x points per dollar spent)

Alaska Airlines Visa

Annual Fee: $75

I fly Alaska every couple of months, so this card is a no-brainer for my wallet. I don’t always book flights with the card, because my Chase Sapphire Reserve has better travel protections.

However, the card pays for itself each year with just one feature: Alaska’s Famous Companion Fare. Use the card to buy one main cabin ticket at the regular price, and the second passenger flies for just $99 plus taxes (about $121). My wife and I often use this benefit during Thanksgiving, when fares are typically much higher. For example: We’ll spend $450 on one ticket, but just $121 on the second — $571 for two people. Not only is that a great MSY-SEA fare for two, but both passengers earn their full frequent flyer miles.

Unlike some companion fares, Alaska puts no restrictions on theirs. You won’t be bumped into a higher fare class on the original fare. Thus, you can book the cheapest fare, and the companion flies for approximately $121 on the same reservation. Your first companion fare code will be available shortly after opening your credit card account.

Bottom Line: We use the companion fare for more expensive round trips and get $300+ in savings each year. That easily justifies a $75 annual fee. In addition, Alaska Visa cardholders get a free checked bag, a 50% discount on day passes in the Alaska Lounge, and a 20% credit for onboard purchases. It’s a must-have card for anyone who flies Alaska.

Delta SkyMiles Platinum American Express Card

Annual Fee: $250

American Express recently refreshed its entire line of Delta SkyMiles credit cards. If you fly Delta regularly, you should consider keeping one of these cards in your wallet.

I went with the mid-tier Delta SkyMiles Platinum American Express card. This card is typically recommended for Delta frequent flyers, yet I hold no status with the airline. But cardholders annually receive a Companion Certificate that can be redeemed for a domestic main cabin round trip each year. The companion ticket will still be assessed taxes and fees, with a maximum cost of $75.

I’ve seen many complaints about the restrictions that accompany Delta’s Companion Certificate. Per Delta’s terms and conditions: “Seats are only available in L, U, T, X, V classes of service and may not be available on all flights or markets.”

With that in mind, I’d recommend you try and use the Companion Certificate at your first opportunity. That said, I feel confident I can get enough value from the annual Companion Certificate to make the Platinum card’s $250 annual fee worthwhile.

Additional card benefits:

• If you’re chasing status on Delta, you can earn up to 20,000 Medallion Qualifying Miles (MQM) each year — 10,000 for every $25k you spend on the card, up to twice each year.
• A free checked bag for the primary cardholder and everyone traveling on the same reservation (up to 9 people)
• Access to Delta Sky Club lounges for the cardholder and up to two guests for $39 per person. Without this card, you can no longer purchase a day pass to a Delta Sky Club for yourself.
• Save 20% on all onboard purchases.

Bottom Line: I think the Delta SkyMiles Platinum Card can be a good value for the occasional Delta traveler, especially one without Medallion status. But it all depends on the savings realized from the Companion Certificate. Each year, I’ll be looking to save somewhere in the neighborhood of the annual fee ($250). If my annual savings approaches that amount, the card is a great value.

Note that your first Companion Certificate will be deposited during your renewal month, once you’ve had the card for a year.

Hilton Honors American Express Aspire Card

Annual Fee: $450

The Hilton Honors American Express Aspire is another premium card, the top-tier credit card in the Hilton Honors portfolio. I resisted this card for awhile, but finally upgraded from the mid-tier Hilton Honors Surpass card.

The Aspire easily pays for itself with three incredible benefits:

• A $250 airline fee credit — Covers incidentals on one specific airline of your choice (from a list of eight). You must pick an airline to receive the benefit.
• A $250 Hilton resort credit — Covers everything from room rate to restaurants at any of Hilton’s specified resort properties.
• An annual free weekend night certificate — good for a free night at nearly any Hilton property, including top-end Waldorf Astoria and Conrad Hotels.

We live on the Alabama Gulf Coast and very close to two of those Hilton resorts. So it’s easy for us to use this benefit, even if we’re just heading to the beach overnight. If you don’t live close to a resort, use of this benefit may require more planning.

I should also mention the notorious American Express airline fee credit. It’s unnecessarily complicated. First, the fee only covers incidentals — onboard food and beverage, upgraded seat selection, baggage fees, ticket changes, and the like. Second, AMEX requires card holders to select which one airline they’d like to receive the credit with. If you select Delta, you won’t get the credit from spending on United. So choose wisely! But despite the complications, we have always managed to get full value from this credit — usually from in-flight food and drink over the course of a year.

Bottom Line: The two $250 credits are worth a total of $500, which more than pays the annual fee. But the Aspire card also gives you top-tier Diamond status with Hilton Honors and a free weekend night at nearly any hotel in the Hilton portfolio. You should easily get another $200+ of additional value from that free stay.

Marriott Bonvoy Brilliant American Express Card

Annual Fee: $450

I have two Marriott credit cards, one from Chase and this card from American Express. The Marriott Bonvoy Brilliant American Express Card is the chain’s premium credit card, but I’ll admit to not using it a lot. Mainly, I have it for the annual $300 travel credit at Marriott properties. This credit effectively reduces the card’s annual fee to a more manageable $150.

In addition, card holders receive an annual free night certificate good for any 50,000-point redemption. This was a much better deal before Marriott Bonvoy’s latest points devaluation. Before devaluation, I could book a night at the Ritz-Carlton New Orleans — a hotel that usually goes for $500 or more — on a free night certificate. Now, that same 50,000 points will get me an off-peak night at the JW Marriott New Orleans. It’s still nice, and still a good value. But it’s not the Ritz-Carlton.

Bottom Line: I’ll have no problem spending $300 at Marriott properties each year and getting full value from my annual credit. As long as I use my free night certificate for a hotel that goes for more than $150/night, I’m coming out ahead and getting a great value with this card.

Marriott Bonvoy Boundless Credit Card

Annual Fee: $95

I don’t use either of my Marriott credit cards that much. I already have far more Marriott points than I need and don’t need to stockpile any more — not right now. But I like this card because of its annual free night certificate, redeemable for stays that cost up to 35,000 points.

Once again, Marriott’s recent points devaluations have reduced the value proposition for this card. But that annual free night is easily worth more than the annual fee. In many cases, substantially more.

World of Hyatt Credit Card

Annual Fee: $95

The World of Hyatt card is one of my very favorites, in part because Hyatt is arguably my favorite hotel chain. The card itself has a lot of great benefits: entry-level Discoverist status, five nights credit toward higher status and other perks (like Club Upgrade Awards), and a free night certificate redeemable in a Category 1-4 property each year.

The World of Hyatt Credit Card encourages spending, and I spend with it to get even more benefits.

• If you spend $15,000 a year, you’ll get a second free night certificate, again good for a Category 1-4 property.
• The World of Hyatt card awards 2 nights’ of elite status credit for every $5000 spent on the card, essentially allowing you to buy your way to higher status.

Bottom Line: Even if you never spend on this card, one free night at a Category 1-4 Hyatt property is worth more than the $95 annual fee. But when you spend $15,000, you have another free night. That makes the World of Hyatt credit card one of the best cards available at its price. If you like the Hyatt portfolio, this card should find a spot in your wallet.

Citi AAdvantage Platinum Select World Elite Mastercard

Annual Fee: $99

I have a credit card from each of the country’s legacy carriers — United, Delta, and American. Generally speaking, you won’t find as much value in airline credit cards as hotel credit cards.

The Citi AAdvantage Platinum Select is a better card for those who spend $20,000 a year or more with it. Once you hit that threshold and then renew your card for another year, you’ll receive a $125 American Airlines discount certificate.

If you don’t use the card much, its primary value is the free checked bag for you and up to four travel companions on the same reservation. However, this is a domestic benefit only. I found this out on a trip to Cuba, where we still had to pay the baggage fees. Many of AA’s international flights don’t have fees for the first bag, except for Basic Economy fares, but not all.

Bottom Line: I don’t have status with American Airlines, but my wife and I usually fly American once or twice each year. In that case, the free checked bags will usually cover the fee.

With Alaska joining the oneworld alliance in Summer 2021, I’ll be able to use my Alaska elite benefits for free checked bags on American. At that point, I may not have any further use for this card.

United Explorer Card

Annual Fee: $95

The United Explorer Card again offers a free checked bag to cardholders flying United. We fly the airline at most once a year, but the savings pay for the card in those years.

In addition, the Explorer Card has two additional worthwhile benefits:

• Two United Club day passes each year
• Expanded access to “Saver” award travel

I have no idea why Chase doesn’t talk up this access to cheaper award travel more often. “Saver” awards are the lowest priced award travel options. Last Thanksgiving, I found exclusive saver award travel to London-Heathrow for just 36,000 miles round-trip — a nice savings over the more common 60,000 miles. It would not have been available to me without the United Explorer Card, and this is a key reason why I keep the card.

Bottom Line: This is another borderline card for me, because I’m no longer a United frequent flyer. I haven’t flown United regularly since 2015.

That said, I won’t drop this card because I’ve had it longer than all the others. Let’s address another issue of your credit score: the age of your oldest account. As it relates to your FICO score, your oldest account is calculated into the length of your credit history — a measurement that represents 15% of your credit score. Best advice: Don’t close your oldest account if you can avoid it.

IHG Rewards Club Premier Credit Card

Annual Fee: $89

The IHG Rewards Club Premier credit card is another hotel card with some nice perks — mainly, the annual free night certificate card holders receive. This free night is limited to hotels that can be booked for 40,000 points or less. It’s a restriction that limits the card’s appeal, but you’re almost sure to get at least $89 in value with your free night, covering the annual fee.

In addition, card holders receive a free reward night when booking four or more nights with points. That is, book four reward nights and pay (with points) for just three. I’ve used this benefit at the Intercontinental New Orleans, allowing me to get four nights accommodations for just 150,000 points.

The card also comes with automatic Platinum Elite status, which honestly isn’t all that great. But it does provide some limited room upgrades and is better than no status at all.

Bottom Line: I don’t use this card much, but the annual free night makes it worth hanging onto.

IHG Rewards Club Select Credit Card (Discontinued)

Annual Fee: $49

Sadly, this card is no longer available. Chase has pushed most holders of the IHG Rewards Club Select card toward its newer Premier card. But rather than upgrade, I wisely chose to keep this card in my wallet and applied for the Premier card separately. If you still have the Select card, I’d recommend you do the same.

Like the newer Premier card, the Select card comes with a free annual night certificate. Like the Premier card, the free night is limited to a hotel that can be booked with 40,000 points. Before the Premier card, the free night certificate was good for any hotel in the IHG portfolio — an incredible value when compared to its $49 annual fee. But the value is still excellent, and I plan to keep this card as long as Chase allows.

Bottom Line: If you have this card, keep it. Again, it’s fine to have a lot of credit cards, even when two of them cover the same hotel brand. Just be sure you’re getting good value from both. In this case, both cards give me a free night. Both cards are a great value.

Hint: If you have both the IHG Premier and IHG Select card, you should bill your room charges in most cases to the IHG Premier. The newer card gives 10x points on hotel purchases, while the older Select card gives just 5x points.

Barclay NFL Extra Points Card

Annual Fee: $0

This is the only card I have with no annual fee. It’s also the only card I possess that’s not focused on travel rewards.

The Barclay NFL Extra Points Card offers 2x points on NFL purchases and 1x points on everything else. Those points can be redeemed for NFL experiences, or redeemed for cash back at the rate of one cent per point. There are several cards with better value propositions; but for NFL fans and especially season ticket holders, this card has some advantages.

Use this card for NFL ticket purchases and get 0% APR for six months. I use the card to pay for my New Orleans Saints’ season tickets and avoid a big bill all at once.

Barclay Arrival Plus Mastercard (Discontinued)

Annual Fee: $89

Chip and PIN cards are a bit of a rarity in the United States, but I wanted one just in case I needed it on a European trip. That’s how I discovered this credit card from Barclays US.

The concept behind the Barclay Arrival Plus World Elite Mastercard is simple: you earn two points per dollar spent. Those points can be redeemed for travel purchases, at the rate of one cent per point.

Not only that, you get another 5% back on your point redemptions. Let’s look at a $1000 travel expense:

• First, make sure you have enough points, in this case 100,000.
• Choose the $1000 expense for reimbursement from a list of expenditures in your account.
• Barclays will cover that expense and withdraw 100,000 points from your account.
• Barclays will then give back 5,000 points to your account.

Essentially, you’re getting 2.1% back in travel for every dollar spent.

Many credit cards have bonus categories and may represent better value in those categories. For example, the Chase Sapphire Reserve’s 3x points on travel and restaurants make it a better value for spending on those categories. But whenever you buy something that won’t earn bonus points with another card, I always use this one. It offers great everyday value and a simple concept. Sadly, it is no longer available to new applicants.

Final Thoughts

It’s just fine to have a lot of credit cards, it really is. But you shouldn’t just leave them in your sock drawer. Credit card issuers like to see you using their cards, so I recommend use set up some automatic payments with cards you don’t normally use. That should keep the bank from closing your account, in most cases.

Also, remember that travel reward cards tend to have high interest rates. There is absolutely no value in a credit card if you are unable to pay in full each month. The interest will eat up all that value in short order.

That said, find the travel reward cards that can help make you a smarter, more value-driven traveler. Have a plan to build your card portfolio slowly. That’s partly because the banks don’t want to see you applying for a bunch of cards at once, but it’s also because each card’s welcome bonus requires a minimum spend to receive it. The last thing you want to do is struggle to meet a minimum spending threshold on multiple credit cards at once.