What’s in Your Wallet? How to Decide Which Credit Cards to Use

by Miranda Marquit · 7 comments

credit card wallet
I love the idea of using credit cards for everything. In fact, I do use credit cards for most of my purchases. Credit cards allow me to automate my finances to some degree, maintain a good credit file, and rack up rewards points that can be redeemed for free travel, cash, or other perks.

But how many credit cards should you have, and how many of those cards should be in your wallet? Which card should you use the most? With each card offering different percentages on your purchases as reward, spending a bit of time to think this through will make a measurable difference to your long-term well being.

How Many Credit Cards Do You Need?

As with all things personal finance, your credit card habits need to be tailored to you. Think about what is likely to work best for you in the long run. If you just want one credit card to help you build your credit profile, and you hope to enjoy a little extra benefit if it’s a rewards card, that’s fine.

In fact, if you are new to handling credit, or if you are unsure of how well you can handle credit, it’s probably a good idea to start slow, keeping only one credit card in your wallet.

On the other hand, it can be helpful to have two or three credit cards in your wallet. I usually have three credit cards. That way, if something goes wrong with one card, I have a backup or two ready to swipe instead.

You can also maximize your rewards cash back better with more than one credit card. You can get a rotating category credit card and a credit card that offers a flat 2% cash back. During quarters when you receive the special 5% cash back, it makes sense to use that card. But the rest of the time, when it’s not for items that fall into the higher rewards category, you can use the other card. It’s one way to make sure you are getting the cash back you want.

In some cases, you might want different rewards. I usually put online purchases on a credit card with rewards that are paid as cash back to a 529 account for my son. However, most of my daily spending goes on a travel rewards card. I’ve already used my rewards on three trips this year (plane tickets for my son and me once, and plane tickets for me once). Finally, I have a credit card I use for business. I redeem for discount gift cards I can give to friends and family.

Finally, it can make sense for churners to have several different credit cards just because it allows them to build up points faster. Building rewards, taking advantage of low financing, and playing one card issuers after another.

Figure out what matters to you, and choose your credit cards based on that information. If you feel like you can’t handle a credit card right now, then start slow. While credit cards can be great tools, the reality is that you can quickly end up overwhelmed by debt if you aren’t careful.

This almost goes without saying, but it’s so important I need to say it again. Make doubly sure to pay off the balance each month no matter how many credit cards you have in your wallet. Otherwise, you’ll just be killed with high interest fees.

So… how many credit cards do YOU have?

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  • ThePointSoldier says:

    Over a dozen. I usually keep 8 or so in my wallet at a time. Though that changes when I travel abroad. I only take the ones w/o a FTF in those cases. Most of my cards are strictly for one specific spending category. And yes, paying off the statement balance each month is a given.

  • Finance Solver says:

    I currently am a proud owner of 4 credit card accounts (just applied for a 5th one) that I obtained as a college student. I pay off all my accounts in full every month and have never paid any interest. I really like each individual rewards that I receive and am looking at applying for a couple more in the coming year!

  • Ryan G says:

    I have different cards for different purposes. I am living overseas right now, so I have two cards with no foreign transaction fees. One is my “main card” which gives me 2% on dining and travel expenditures and 1% on everything else. The second is my “backup card” that gives me 1.5% on all purchases. I have an Amazon Visa for rewards/points with Amazon. Finally, I have an older CC that gives me 1% on everything, and then extra in some other categories. This card gets a few things auto-billed to it, but I doubt it will be my primary card even when I move back to the US.

    I have other cars that I opened simply for balance transfer, or specific initial rewards/perks. They all offer periodic good deals on balance transfers if I want to make myself a loan. Otherwise they sit idle.

    • David Ning says:

      Have you considered a 2% cash back on everything Visa card? Capital one has business card like that with no foreign transaction fee and you can get rid of two cards with that.

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