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Credit utilization


With nearly 60 million credit cards floating around the UK, it’s fair to say plenty of us are using multiple credit cards at once.

But how many is too many?

If you’re wondering about opening another account, consider the pros and cons before you make a move.

Lower your credit utilisation

Multiple credit cards, if used correctly, are great for your credit score. This is because of a feature called credit utilisation and how credit providers perceive it.

Credit utilisation is, in short, the percentage of credit you are using against your credit limit. For example, if you had a monthly credit limit of £1,000 and were using £800 a month, your utilisation would be 80%. £500 would be 50%, £200 would be 20%, and so on.

Where your provider is concerned, high utilisation is bad news and will affect your credit score negatively. Providers like to see utilisation of no more than 30% so, if you are close to your credit limit on one card (indeed anything above 30%), it benefits you and your credit score to spread the debt across several cards.

Spread the spend

Speaking of spreading your debt, the same process is beneficial to those struggling with a lot of debt on one card or looking to spread out a purchase cost (and avoid high utilisation).

Where high interest debt is concerned, you can use multiple cards to transfer a balance from a high interest account to a new, 0% interest card or two in order to release the pressure on an account building interest. It’s a temporary solution but saves you money in the long run.

Back yourself up

If credit cards are your main source of payment, it’s worth having multiple cards so one can be used as a backup or for emergency use.

This is useful if your card provider freezes your main card, for example if it suspects fraudulent use, or an unexpected payment comes up that needs dealing with immediately.

Reap the rewards

Credit cards offer various incentives to spend, and different credit cards offer different perks. An example would be a percentage cashback amount on certain purchases across the month.

Using different cards on the right purchases means you’re getting the most back from your spending.

Don’t lose track

The big risk with multiple cards is that they can, if mismanaged, rack up debt and harm your credit score.

The more cards you have, the easier it is to lose track of both spending and repayments. Purchase frivolously and you may spend more money than you have. Meanwhile, missing repayments can mean interest and a hit on your credit score.

The combination of the two is a vicious and very damaging cycle you don’t want to find yourself in.

Unwanted extras

Whilst you’ll no doubt be looking for the best interest deals and lowest charges, introductory offers do come to an end and many cards come with an attached monthly fee.

If you’re running a handful of cards, such fees and interest can add up, leaving you with unwanted costs at the end of the month.

Fraud risk

Just as it’s easy to lose track of your spending and repayments, it’s also harder to notice possible theft or fraud across multiple accounts if you’re not paying too much attention.

An unlikely occurrence, but another thing you need to be on top of.

So, how many cards?

The answer is no one really knows!

It depends on your current situation with outstanding debt and your future plans. More than anything your ability to responsibly manage your finances will be the determining factor in selecting the right number of credit cards for you.


Understanding your credit rating is one of the most essential things when it comes to your financial horizons, but unfortunately, there is so much misleading information and confusion out there that getting the right image about it can be quite challenging. To shed some light on the matter, we’ll share some valuable tips about it in the paragraphs below:

Eighteen people have been charged with stealing at least $200 million in a credit card fraud ring, possibly one of the largest in US history

1. There are 5 factors that influence it

While the exact percentages of how each of these affects your credit rating are rather much a mystery, it’s a fact the following factors all play a role in it:

– Payment history

– Average credit age

– The frequency of inquiries

– Credit utilization

– Account mix

2. There are many credit ratings

Quite surprisingly, your credit rating depends on where you check. Most notably, FICO is usually referred to as the golden standard and the so-called ‘true rating’ you’re probably looking for.

3. Negative hits against your score don’t last forever

You’ve probably had your fair share of dents in your credit score, but these won’t affect it for your entire life. As a matter of fact, after 7 years have passed, they will no longer play a role in determining it or show up in your credit reports.

4. Checking your own credit score won’t lower it

You might have heard that your credit score takes a hit when a lender checks it, for instance. This is true; however, if you just want to know where you stand, checking your own won’t have any negative consequences on it.

5. Don’t max out your credit card

The best practice is to avoid pushing the limits. Even if you get one of the best credit cards for fair credit, don’t go beyond 30%, or it may have a negative effect on your credit score.

6. Having a low credit score may cost you thousands of dollars in the long run

Even if you manage to get approved for a loan, for example, the interest rates may be higher due to having a lower credit score. There are many examples like this, and over the course of time, this can amount to thousands upon thousands of dollars.

7. Joint accounts will affect your credit score

Although there is no such thing as joint scores, what your partner does on your joint loan or credit account will affect your credit score as well.

8. Being responsible with your finances is the best way to keep your credit score in good standing

In other words, making your payments on time, not spending more than you can afford, and not being a financial risk when dealing with companies will get you far.


Although the topic of credit rating goes far beyond what the scope of this article can cover, these are the bare essentials of what you need to know about it and how to handle your finances responsibly. In the end, it’s important to understand that managing your finances the smart way will not only affect how companies and potential business partners view you, but also define the quality of your life.