# One credit card or many; does it affect credit rating? **URL:** \ **Category:** Factual Questions\ **Created:** [November 13, 2002, 1:21pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570 "2002-11-13T13:21:15Z")\ **Posts on this page:** 11\ **Page:** 1
**Author:** ![Cuckoorex](https://avatars.discourse-cdn.com/v4/letter/c/ad7895/32.png) [@Cuckoorex](https://boards.straightdope.com/u/Cuckoorex)\ **Post date:** [November 13, 2002, 1:21pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/1 "2002-11-13T13:21:15Z")
What I mean is; assuming that I’m able to keep up on payments for as many credit cards as I’m able to get, would it make a big difference in my credit rating if I had 5 such cards instead of a single card? Or am I running a greater risk of having a big negative impact if even I fall behind in payments on even one of the cards (even if I keep up on the others)? ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [November 13, 2002, 1:29pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/2 "2002-11-13T13:29:16Z")
If you can keep up on many cards, then you’re credit rating will be first-class. “Falling behind” needs to be defined. As long as your paying the minimum, you’re not falling behind (as far as the bank is concerned, but you’re not going to pay off your debt). As long as you pay at least the minimum for each card on time each month, your credit will be unaffected. It’s only if you don’t pay anything at all that things get dicey. ---
**Author:** ![Aro](https://avatars.discourse-cdn.com/v4/letter/a/b3f665/32.png) [@Aro](https://boards.straightdope.com/u/Aro)\ **Post date:** [November 13, 2002, 1:38pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/3 "2002-11-13T13:38:35Z")
Multiple cards are great, if you can keep track of what’s on all of them, what the offers are in place, the APR rating for cash advances / purchases etc… I have seven cards at the moment, and I move the balance about between them, routinely calling up the company and haggling the APR on the cards down. (two are now 0% for the next 8 months, with the others around 3.9% lifetime APR.) All have a high credit limit, with about £25,000 available between them. Handy in a crisis… It works out a lot cheaper than any loan (cash advance & balance transfer to another card), **IF** you remember when to move the money on to the next. Of course, you still have to make minimum payment on each card, which can be troublesome. Miss one payment on any card and things could start to go really wrong. ---
**Author:** ![Khadaji](https://avatars.discourse-cdn.com/v4/letter/k/9e8a1a/32.png) [@Khadaji](https://boards.straightdope.com/u/Khadaji)\ **Post date:** [November 13, 2002, 1:42pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/4 "2002-11-13T13:42:47Z")
It depends. When getting a mortgage, it is considered to be a bad thing to have many credit cards. This is because you have a very large debt potential. However, I know man with several cards and he had no trouble getting a mortgage, so it all depends on each individual. ---
**Author:** ![Kamikazee](https://avatars.discourse-cdn.com/v4/letter/k/b9e5f3/32.png) [@Kamikazee](https://boards.straightdope.com/u/Kamikazee)\ **Post date:** [November 13, 2002, 1:48pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/5 "2002-11-13T13:48:51Z")
Multiple cards is OK but your **capacity** to charge is a big factor in your credit score. For instance if you have only one card with a 1000 dollar limit and the balance is 900 your score will be adversely affected because you have only 10 % available to charge. On the other hand if you have several cards with a combined limit of 10,000 and a balance of 5000 your capacity to charge is 50%. Your score would actually be higher even though you are carrying a higher debt load. As to the falling behind… DON’T, this will hurt your score more than anything you do with balances, limits, number of cards etc. ---
**Author:** ![Uncommon\_Sense](https://avatars.discourse-cdn.com/v4/letter/u/f9ae1b/32.png) [@Uncommon\_Sense](https://boards.straightdope.com/u/Uncommon_Sense)\ **Post date:** [November 13, 2002, 3:46pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/6 "2002-11-13T15:46:19Z")
This was my experience with our mortgage broker: We were told that too many credit cards can adversely affect your acceptence. In our case the load was low but the potential was high. It would be on a case by case basis. Those with borderlline “good” credit may have some trouble. We were ok, but others may not be. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [November 13, 2002, 4:02pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/7 "2002-11-13T16:02:48Z")
One issue has been touched on several times in the thread, but I’ll expand on it a bit. What some have referred to as potential debt is part of the debt to income ratio, which is often a determining factor in loan approvals. For example, if you have 5 cards each with a $10,000 credit limit, your debt potential is increased by $50,000, even if you only have a balance of a few dollars on the cards. Using this example, when a former company was processing student loans, they would add up your current monthly debt, toss in the monthly payment on the student loan, then also toss in the hypothetical monthly payment on $50,000 worth of credit card debt. They would then compare this number to your monthly income and deny you after a certain ratio was met. The reason for this is there is nothing to prevent a person from running out the day after the loan and maxing out their credit cards, thus making it much more difficult for them to repay the loan you just approved. Most loan processing is fairly straightforward. Your credit score must be higher than a certain number, your debt to income ratio must be below a certain percentage, and any bad marks on your credit report must be beyond a certain age (usually dependent on type of mark: bankruptcies and repos need to be much older than a late payment, for instance). I’m a big fan of having enough potential debt to get you through most emergencies, but anything beyond that is just going to hurt you. ---
**Author:** ![Aro](https://avatars.discourse-cdn.com/v4/letter/a/b3f665/32.png) [@Aro](https://boards.straightdope.com/u/Aro)\ **Post date:** [November 13, 2002, 4:27pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/8 "2002-11-13T16:27:50Z")
That’s interesting. I never had any problem getting my mortgage at all, and I probably had about 12 credit cards at the time of application. (I abuse their offers a lot ) Is it possible ther is a different credit rating system in the UK to the US? (Even if most of the credit card companies and banks are now international ) ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [November 13, 2002, 4:40pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/9 "2002-11-13T16:40:46Z")
Aro, With us, it didn’t matter how many cards you have, only the total credit limit on those cards. Income also made a large difference. If memory serves me correctly, our cutoff point was around 50%, meaning that if your total monthly debt (including the potential debt from maxed out credit cards) was more than half of your monthly income, you would have been denied. Someone with a monthly take home pay of $2000 would have been fine had their potential monthly debt been $1000 or less. I believe we used 2% of the credit limit on bank cards (Visa, MasterCard, etc.) and 3% on store cards (Sears, Amoco, etc.). Thus with a$25,000 credit limit on your bank cards, we would have added $500 to your monthly debt total. ---
**Author:** ![Cuckoorex](https://avatars.discourse-cdn.com/v4/letter/c/ad7895/32.png) [@Cuckoorex](https://boards.straightdope.com/u/Cuckoorex)\ **Post date:** [November 13, 2002, 5:31pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/10 "2002-11-13T17:31:47Z")
OK, so if I have 5 cards and the total potential debt for all of those cards is less than $1400, and I have $200 in student loans and a chapter 13 that was discharged in January of this year, and my monthly gross income is about $3750, then (assuming that I’ve kept up on my card payments and so forth), how likely is it that I’m going to catch hell if I try to finance a house? Am I better off closing out all but one or two of the cards, or will that not make a difference? ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [November 13, 2002, 8:54pm UTC](https://boards.straightdope.com/t/one-credit-card-or-many-does-it-affect-credit-rating/136570/11 "2002-11-13T20:54:06Z")
> [@](#): > > \*Originally posted by Aro \* > \*\*It works out a lot cheaper than any loan (cash advance & balance transfer to another card) \*\* I used to transfer balances too to avoid finance charges, but now they charge 3% of the transferred amount. They must be getting tired of folks using that strategy.