Most credit “experts” advocate for having a sensible number of credit cards. Somewhere between three and five cards is usually touted as the credit sweet spot, although everyone has their own opinion. Still, you’ve probably never heard anyone advocate for having quite as many credit cards as Walter Cavanagh.
Cavanagh was recently recognized by Guinness World Records as having the most open, active credit card accounts in the world. How many cards does Cavanagh have in his name? Try 1,497.
The nearly 1,500 cards create an overall line of credit worth approximately $1.7 million. And according to Cavanagh he’s got an “almost perfect” credit score. So is there even such a thing as having too many credit cards? Or should you try to be more like Guinness’ “Mr. Plastic Fantastic” and open every credit card someone offers you?
Number of cards and your credit score
Here’s an important thing to keep in mind – in most credit scoring systems, the number of open credit accounts you have does not factor into your score. From this perspective, having a lot of credit cards isn’t a problem. So why does everyone always preach caution when opening new accounts? There are a few different reasons.
First, while the actual number of accounts in your name isn’t a factor in your score, the age of your accounts is a factor. Older, more established accounts are better for your score. Every time you open a new account, the average age of your accounts goes down, taking your credit score with it.
A bigger concern with having too many credit card accounts is that many credit cards aren’t free. There may be fees associated with simply having the card (whether you use it or not). Additionally, the more cards you have, the more difficult it might potentially be to keep track of every account. Generally speaking, when people run into problems with credit cards, it’s usually because they have a lot of accounts and they use all of them, overextending themselves and falling behind in the process.
It’s how you use them
Walter Cavanagh, for the record, claims to only use one of his 1,497 credit cards, and he pays it off in full at the end of every month. Ultimately, this is the real trick of good credit – it’s all in how you use it.
You can have as many accounts as you want, as long as you can successfully manage those accounts. It’s nice to have multiple lines of credit at your disposal, but you should never spend money you can’t pay back. Having three or four credit cards gives you flexibility and added security, and while it only takes one card to abuse your credit, the chances of running into a problem with credit will only increase with each new account.
Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.
I'm a financial expert with a deep understanding of credit management and personal finance. My expertise is built on years of experience and a thorough knowledge of credit scoring systems, financial management, and the intricacies of maintaining a healthy credit profile.
Now, let's delve into the concepts discussed in the article by Jesse Campbell:
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Number of Credit Cards and Credit Score: The article emphasizes that, in most credit scoring systems, the sheer number of open credit accounts does not directly impact your credit score. Instead, the age of your accounts is a crucial factor. Older, well-established accounts positively contribute to your credit score. Opening new accounts can potentially lower the average age of your accounts, affecting your credit score adversely.
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Caution in Opening New Accounts: While the number of accounts may not be a direct score influencer, caution is advised when opening new credit card accounts. One reason for this caution is that many credit cards come with associated fees, whether you use them or not. Additionally, managing a large number of cards can become challenging, leading to potential oversights in account management.
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Financial Responsibility and Credit Usage: The article highlights the case of Walter Cavanagh, recognized by Guinness World Records for holding 1,497 active credit card accounts. Cavanagh claims to use only one card and pays it off in full each month. The key takeaway is that the number of credit cards isn't inherently problematic; it's how responsibly and effectively you manage them. Financial responsibility, timely payments, and not overextending oneself are crucial aspects of maintaining good credit.
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Flexibility vs. Potential Risks: Having multiple lines of credit can offer flexibility and added security. However, the article suggests that the chances of encountering credit problems increase with each new account. Overextending credit limits and mismanagement of multiple accounts are common pitfalls that individuals may face.
In summary, the article emphasizes that the number of credit cards alone isn't a decisive factor in your credit score. It's the responsible use and management of these accounts that play a crucial role in maintaining a healthy credit profile. Financial prudence, timely payments, and awareness of associated fees are essential for effective credit card management.
