There is no right or wrong answer when it comes to credit cards, but having too many of them can negatively affect your credit score. Learn more with this essential guide.
Irina Maltseva is a growth marketer with 10+ years of experience in digital marketing. After being scammed by Airbnb and Booking. com, Irina joined Aura to help the company on its mission to create a safer internet for everyone.
Jory MacKay has been writing and editing for print and online publications for more than ten years. She has won several awards. He is passionate about assisting people in recognizing and avoiding fraud, and he holds a bachelor’s degree in journalism from the University of Victoria.
The Short Answer: Having numerous credit cards with no balance isn’t always a bad thing, but it’s also not always a good thing. It depends on your individual circumstances and how you manage your credit.
The Long Answer:
Numerous credit cards with no balance can affect your credit score in both positive and negative ways.
Positive Effects:
- Improved credit utilization ratio: Your credit utilization ratio is the amount of credit you’re using compared to your total available credit. Keeping your balances at zero on multiple cards can help you keep this ratio low, which is good for your credit score.
- Positive credit history: Every month, positive information about your credit card accounts is reported to the credit bureaus. This includes your payment history, account age, and credit utilization. Having multiple cards with zero balance can help you build a positive credit history.
Negative Effects:
- Multiple hard inquiries: When you apply for a new credit card, a hard inquiry is placed on your credit report. Too many hard inquiries in a short period of time can lower your credit score.
- Difficult to manage: Having multiple credit cards can make it difficult to keep track of your spending and payments. This can lead to missed payments, which can hurt your credit score.
- Potential for fraud: The more credit cards you have, the greater the risk of fraud. It’s important to monitor your credit card statements closely for any unauthorized charges.
When It’s Bad to Have a Lot of Credit Cards With Zero Balance:
- You open them all within a short period of time: This can lead to multiple hard inquiries on your credit report, which can lower your credit score.
- You can’t keep track of them: If you have so many cards that you can’t keep track of them, you’re more likely to miss payments or become a victim of fraud.
- They become closed due to inactivity: Some credit card issuers will close your account if you don’t use it for a certain period of time. This can hurt your credit score.
The Bottom Line:
Having a lot of credit cards with zero balance can be beneficial for your credit score, but it’s important to weigh the pros and cons carefully. If you can manage multiple cards responsibly it can help you improve your credit utilization ratio and build a positive credit history. However if you’re not careful, it can lead to negative consequences.
Additional Tips:
- Only apply for new credit cards when you need them.
- Keep your credit utilization ratio below 30%.
- Pay your credit card bills on time every month.
- Monitor your credit card statements for any unauthorized charges.
Disclaimer: I am an AI chatbot and cannot provide financial advice.
Chase Sapphire Preferred® Card
Those who are new to the world of credit card spending and have been bitten by the travel bug may find their best credit card in the form of the Chase Sapphire Preferred® Card.
It offers some impressive rewards like:
- 10x points on dining purchases with Ultimate Rewards®
- 5x points on flights.
- 3x points on all other travel purchases.
- 1 point per dollar spent on all other purchases.
- Points are valued at 20%4040% more when travel is scheduled through Chase Ultimate Rewards.
Additionally, the Chase Sapphire Preferred® Card offers a general sign-up bonus and an easy-to-understand rewards structure. However, all of these features come at the cost of a higher-than-average annual fee.
Additionally, it offers a fantastic welcome bonus, with new cardholders able to earn 60,000 bonus points after spending $4,000 within the first three months of opening an account.
If youâre looking for similar benefits without the high annual fee, you may want to consider the Chase Freedom Unlimited® card. Along with a $0 annual fee, the Chase Freedom Unlimited card comes with some pretty impressive perks, including:
- 5% cashback is available on grocery store purchases up to $12,000 spent in the first year (Walmart and Target excluded).
- 5% on travel purchases through the Chase Ultimate Rewards® card.
- 3% cashback on dining at restaurants and drugstore purchases.
- Unlimited 1.5% cash back on all other purchases.
Customers who spend $500 on purchases within the first three months of opening an account are also eligible for a $200 bonus.
Blue Cash Preferred® Card from American Express
Another great option from American Express is their Blue Cash Preferred® card, which is typically a great choice for everyday family purchases. The rewards that customers can enjoy on this card include:
- 6% cash back at supermarkets.
- 6% cash back on select streaming services.
- 3% cash back on taxis, rideshares, parking and trains.
- 3% cash back at gas stations.
- 1% cash back on other purchases.
Additionally, customers receive a $2500 statement credit upon spending $3,000 on their new card within the first six months of use.
3 Reasons Why I Keep A Zero Balance on My Credit Cards
FAQ
Is 10 credit cards too many?
Is it good to have multiple credit cards with low balances?
Is it good to have lots of empty credit cards?
How many credit cards should you have for good credit?
Is a zero balance credit card bad?
Having credit cards with zero balance also results in a low credit utilization ratio, which is good for your credit score, too. One case where it would be bad to have a lot of credit cards with zero balance is if you open How often do you carry a balance on personal credit cards?
Can a zero balance affect my credit score?
Unless you carry a zero balance on all your credit cards, this change leads to a higher credit utilization ratio which can negatively impact your credit score. This is especially important if the increase in your credit utilization will surpass 30% of your available credit. How many points will my credit score drop if I close a credit card?
What does a zero credit card balance mean?
When your credit card balance is zero, that means there is no payment due. Keeping a zero balance is a sign that you’re being responsible with the credit extended to you. As long as you keep utilization low and continue on-time payments with a zero balance, there’s a good chance you’ll see your credit score rise, as well.
Should you keep a credit card with a zero balance open?
Keeping a credit card with a zero balance open may help you improve your credit score, since it can lower your credit utilization ratio and could increase your average age of credit. It also may serve as a safety net for unforeseen or emergency expenses.