Study: Most Americans Have One or Two Credit Cards

Credit cards are a great way to build credit, score rewards and cash back, and access consumer protections -- but how many should you have?

If you feel as though your wallet should be overflowing with credit cards so you can take advantage of different spending bonuses and reward types, don't fret. Most Americans have one or two credit cards and over half think they have the right amount of credit cards.

Having one or two credit cards is in line with what Motley Fool Money's credit card experts recommend -- although that's not a hard-and-fast rule and can change based on particular situations.

Read on for credit card ownership statistics and views Americans hold on how many credit cards they should have and why.

Is it good or bad to have multiple credit cards? Most Americans have one or two

Thirty percent of Americans have one credit card and 24% have two, meaning the majority of American adults aren't flush with credit cards, according to a Motley Fool Motley Fool Money survey.

In fact, just 13% of American adults have three credit cards and another 13% have four or more credit cards.

How many credit cards do you have?

Motley Fool Money recommends that most consumers should have one or two credit cards. That will provide access to the most secure payment method, rewards, and a way to build credit.

Having multiple credit cards raises the risk of overspending or missing a payment, which can lead to credit card debt and harm your credit score.

That said, if you are confident about managing spending on credit cards and want to maximize credit card rewards and access the best credit cards, having two or three credit cards is an option.

Americans with a higher credit score have more credit cards

Higher credit scores correlate with owning more credit cards. The percentage of American adults who have three or more credit cards rises by between 6% and 12% between each credit score bracket from poor to excellent.

American adults with higher credit scores are also more likely to have four or more credit cards. Twenty-eight percent of Americans with an excellent credit score have four or more credit cards, compared to 18% of those with very good credit scores and 10% of those with very good or good credit scores.

Forty-three percent of Americans with a poor credit score have no credit cards, the largest percentage by far among credit score cohorts. Americans who are rebuilding credit should have one credit card. Using the card responsibly can help rebuild credit, but it's important to not miss payments and further degrade your score.

Credit card ownership by credit score

Credit card count increases with age and wealth

Older and more wealthy Americans are more likely to have multiple credit cards than younger and less wealthy Americans.

When it comes to age, 42% of Generation Z has just one credit card and only 12% has three or more. Older generations are much less likely to have a single credit card -- about 30% of millennials and Gen X hold just one credit card and only 24% of baby boomers own a single credit card.

Older generations are also more likely to have three or more credit cards relative to Gen Z. While 12% of Gen Z have three or more cards, that percentage jumps to 42% for baby boomers and 25% for Gen X.

Credit card ownership by generation

Looking at income, 25% of lower-income Americans have no credit card and 36% have a single credit card, while just 10% of high-income Americans report having no credit cards and only 16% say they have one.

At the same time, 19% of lower-income Americans have three or more credit cards while 43% of high-income Americans say they have three or more cards.

Credit card ownership by income

Twenty-three percent of Americans think they should have more credit cards; 18% think they should have fewer

The majority of American adults (59%) believe they have the right amount of credit cards. Twenty-three percent think they should have more credit cards while 18% believe they should have fewer.

Do you think you should have more or fewer credit cards?

Younger Americans think they should have more credit cards

While no majority of any generation believes they should have more credit cards, Gen Zers are most likely to think they should have additional credit cards while baby boomers are least likely to believe so.

Younger Americans are more likely to think they should have more credit cards and less likely to think they should have fewer cards or have the right amount of credit cards compared to older generations.

Thirty-five percent of Gen Z believe they should have more credit cards compared to 29% of millennials, 20% of Gen X, and 11% of baby boomers.

On the other hand, 21% of baby boomers think they should have fewer credit cards and 68% believe they have the right amount of cards, the most, respectively, in each category among any generation.

Do you think you should have more or fewer credit cards?

Keep in mind that older Americans are more likely to have more credit cards than younger Americans, so it follows that they are somewhat more likely to think they have too many credit cards.

Americans with a good or better credit score are more confident they have the right amount of credit cards than Americans with a fair or worse credit score

Whether Americans think they have the right amount of credit cards also varies by credit score. Americans with a poor or fair score are less confident that they have the right amount of credit cards than those with better scores.

Americans with exceptional credit are most likely to think they have the right amount of credit cards. Sixty-nine percent are satisfied with their current credit card count and the remainder are nearly split on whether they should have more or fewer credit cards.

Sixty-three percent of Americans with very good credit think they have the right amount of credit cards. Twenty-two percent think they should have fewer cards and 15% think they should have more.

Americans with credit scores below 740 are more likely to think they should have more credit cards than fewer, although the majority of them think they have the right amount.

Do you think you should have more or fewer credit cards?

Using a credit card responsibly is one way to improve your credit score -- as long as payments are being made on time.

Americans want more credit cards to improve their credit score

Among Americans who think they should have more credit cards, the most common reason (45%) is to improve their credit score.

Thirty percent of Americans who want more credit cards say they want to be able to spend more and have more credit. Twenty-five percent said they want more cards to maximize rewards.

Why do you want more credit cards?

Having more than one credit card can be good or bad for your credit score -- what matters most is whether you are making payments on time and keeping your credit utilization below 30%. Having more cards will raise your overall credit limit and allow you to spend more while keeping your credit utilization low, which is good for your credit score.

However, if you are making late payments your credit score will suffer, no matter how many credit cards you have.

There are some other drawbacks to opening multiple credit cards. Opening a new credit card will lower your average credit history age and generate a hard inquiry on your credit report, both of which can lead to a decrease in your credit score. More cards also means more accounts to keep track of and potentially a higher likelihood of overspending or missing a payment.

Younger Americans are more likely to want more credit cards for rewards than older Americans

Reasoning for wanting more credit cards varies by generation. Baby boomers are less likely than any other generation to seek more credit cards in a bid to boost rewards while they're more likely to want more cards to be able to spend more.

Millennials are least likely to want more cards to improve their credit score and are most likely to want additional credit cards to maximize credit card rewards.

Why do you want more credit cards?

Americans with lower income and credit scores are more likely to consider more credit cards to try to boost their scores

Given that additional credit cards have the potential to improve a user's credit score, it is not surprising that 50% of Americans with lower incomes want more credit cards to boost their credit scores -- a larger percentage than any other income bracket.

Middle- and high-income Americans are more interested in opening more credit cards to boost rewards and have more credit to work with. However, boosting their credit score is still the most popular reason for wanting to add more credit cards to their wallets.

Why do you want more credit cards?

The primary objective for Americans who want more credit cards and have a credit score below 740 is to boost their credit score, followed by having more credit to work with. Much fewer of those Americans are interested in maximizing rewards compared to Americans with a higher credit score.

For Americans with a credit score of 740 or above, their main motivation for wanting more credit cards is to maximize rewards, followed by improving their credit score and having more spending room.

Why do you want more credit cards?

Americans want fewer credit cards to better manage their spending

Among Americans who want fewer credit cards, 51% say their primary motivation to close accounts is to reduce credit card debt or manage their spending.

Thirty-four percent of Americans who want fewer credit cards say they're seeking to improve their credit score and 15% say they want to cut down on annual fees.

Why do you want fewer credit cards?

It's important to note that closing a credit card account can lower your credit score by reducing your overall credit limit, which can boost your utilization above 30%. It can also affect the average age of your accounts, another factor used to determine credit scores. If you intend to close a credit card, make sure you either reduce your overall spending or increase your credit limit on your remaining cards.

Older Americans are more likely than younger Americans to want fewer credit cards to rein in spending

Sixty-nine percent of baby boomers who want fewer credit cards do so to better manage credit card debt or spending -- a higher percentage than any other generation. Just 5% want fewer cards to cut down on fees.

Among Gen Xers who want fewer cards, 50% seek to manage spending and debt, 18% want to reduce annual fees, and 32% want to improve their credit scores.

For younger Americans that think they should have fewer credit cards, improving their credit scores is their top priority, followed by better managing spending or credit card debt and lowering annual fees. Millennials are more focused on the latter two objectives while Gen Z's priorities are relatively evenly distributed, with a slight tilt toward improving credit scores.

Why do you want fewer credit cards?

Wealthy Americans are least likely to want fewer credit cards due to annual fees

Among wealthy Americans that want to eliminate some of their credit cards, just 1% cite cutting down on annual fees as the primary reason for doing so. Instead, 62% say they want to better manage their spending and 37% say they want to improve their credit score.

That tracks with wealthy Americans being more interested in interest rates and rewards than annual fees when considering credit cards.

Better managing credit card debt and spending are also top priorities among middle- and lower-income Americans, although they are more likely than wealthy Americans to want to reduce their credit card count to reduce annual fees.

Why do you want fewer credit cards?

The pros and cons of having multiple credit cards

While most Americans think they have the right amount of credit cards, there are still significant percentages that believe they should have more or less credit cards -- usually with the goal of improving their credit scores or managing spending.

Credit card count can influence credit scores and spending but card usage -- most importantly making payments on time and maintaining a low credit utilization ratio -- is more important.

These are some other pros and cons of having multiple credit cards.

Pros

• Multiple credit cards can raise the total amount of credit available to you, which can lower your credit utilization ratio -- one factor that impacts credit scores.
• You can earn more and different types of rewards with different credit cards, for example by using a credit card that earns bonus points on groceries and gas alongside a card that earns extra rewards for dining at restaurants.

Cons

• Opening new credit cards lowers your average credit history age, which negatively impacts your credit score.
• Opening new credit cards generates a hard credit inquiry, which can temporarily lower your credit score.
• Having multiple credit cards means multiple balances to keep track of and a potentially higher chance of missing a payment.

Methodology

Motley Fool Money distributed the survey to 2,000 American adults via Pollfish on March 6, 2023. Responses were post-stratified to generate nationally representative results.