Use one credit card or multiple cards?

Is it better to have one credit card with a high limit, or multiple cards with lower limits?

The answer as to whether is it better to have one card with a large limit or multiple cards with smaller limits (assuming your choices are limited to one or the other) will depend on where your focus is when determining “better”.

For example, if you’re looking at which scenario will be better for your credit score, it probably won’t make a difference. One card with a $9,000 limit will likely be viewed similarly to three cards, each with $3,000 limits.

If you’re looking at which approach is better from a convenience point of view, then maintaining one card is easier than three. With one higher-limit card you can put everything on one card, not worry about dividing a single purchase across multiple cards, and there is just one bill to pay. Multiple cards with lower limits make big purchases harder (especially on-line) and increase the number of statements to review and the number of bills you end up paying.

From a security point of view, it is better to have multiple cards. If you have just one card and it is broken, stolen, or compromised, you’ll not only have it frozen, but you won’t be able to make any new credit card purchases for about two weeks while you wait for your replacement card to arrive in the mail. On the other hand, if you have multiple cards and one is compromised or goes missing, then you have at least one backup card you can use while you wait for your replacement card.

In terms of flexibility, it makes sense to have multiple cards. I’ve occasionally run into situations where a store took MasterCard, but not Visa. Alternatively, I’ve visited websites which accepted Visa, but not MasterCard. Having one card means you are limiting yourself to only dealing with merchants which accept that card. Likewise, if one credit card company’s payment network goes off-line for a while, it is handy to have an alternative card.

On the balance, I think it makes sense to have multiple cards. It’s a little bit more work to maintain them, but the security and convenience offered by having two or three cards is well worth it. Having multiple cards gives you a great deal of flexibility in terms of where and when you can make purchases. Multiple cards also guard against scenarios when one card is damaged, lost, or stolen.