How many credit cards should you have?

How many credit cards should you have? I don't know your number, but I'll explain mine …

Credit and debit cards are a staple of most people's finances. Nearly three-quarters of people in a study (72.1%) have at least one credit card.

But, as I'm sure you're well aware, there are lots of choices for credit cards. Many big retailers have their own branded credit card that they market to you at every opportunity, enticing you with rewards and bonuses for signing up.

It makes for good business, of course. People tend to spend more per transaction with credit cards than with cash. And, since store rewards typically outperform more generic rewards cards, that's more reason to use the card more.

Here's how many credit cards I have

I have seven cards. Here they are, in approximate order when I got them:

• My hometown credit union's Visa. This account is nearly 30 years old; I got the card sometime in high school. I keep it simply because its age helps my credit history.
• My current credit union's Visa. I got this card shortly after I started the job I'm in now. It's not a rewards card, which amazes me that I didn't change over sooner!
• Chase Sapphire Visa. This one is the latest rewards card I have from Chase. I've used this card and previous versions of the card for over a decade. It averages a reward of 1.2% or so across all purchases (some categories reward higher than others).
• AT&T Universal Business Rewards. This one is for my business expenses (to keep them separate from personal expenses). It's a 1% rewards card.
• Chase Amazon Prime Visa. When Amazon offered this card initially, the reward was 3% for Amazon purchases. We got it because we spend a bit on Amazon. Now it rewards 5% on Amazon purchases because we have Amazon Prime.
• Delta SkyMiles American Express. My wife got this one for us last year. The sign-up bonus and the rewards paid for the tickets to a conference we're going to.
• Citi Costco Visa. This card was great to get if for no other reason than the convenience, but it rewards 2% on Costco purchases on top of the 2% we get with the executive membership. (We spend enough at Costco to make it worth carrying.)

Here's how we use the credit cards

Most of the cards we have are rewards cards. It completely defeats the purpose of a rewards card to carry a balance on the card and pay interest that eclipses the rewards (and then some!) So, we don't carry a balance on the cards. Ever. We pay our credit cards off in full, every month.

The main cards we use for personal purchases are the Chase Sapphire, the Costco card, and the Amazon card. We use the Amazon card for Amazon purchases and the Costco Card for Costco purchases. We use the Chase Sapphire for pretty much everything else.

One thing we don't do is expend a lot of energy jumping from card to card to chase bonuses or rewards. Our cards are set up now for automatic payment from our bank accounts; that part is mostly foolproof now. Switching cards often will increase the chance that something will slip, and we don't want that. Our credit is fantastic now and I don't want that to change.

So … how many credit cards should you have?

I don't have the faintest idea. Sorry.

Your context is different than mine, and I'd be presumptuous to suggest that our way is one-size-fits-all. It isn't.

But here are some things to consider when you decide how many credit cards you should have:

• Do you have credit card debt? Hey, it happens. But in this case, it's not the answer to get more credit cards. Dave Ramsey recommends paying off all non-mortgage debt after getting a $1,000 emergency fund. To pay off the debt, he further recommends paying off the lowest balance first, then the next lowest balance, and so forth. Put another way: take care of the credit cards you have now before getting more.
• If you don't, do you have a rewards card? Like I mentioned above, I was leaving a couple of nice dinners on the table by not using a rewards card. The interest rate on a rewards card, in this case, doesn't matter at all, because there's no interest to be paid! Assuming that you use cards only for convenience and don't carry a balance, consider adding a rewards card of some kind to your mix and use it. Get a small rebate for your good spending habits!
• Do you travel a lot? Assuming again that you're a convenience user, then a travel rewards card might be a good one to add to your stash. They usually carry pretty good sign-up bonuses and give a good reward (with extra perks) for the airline they're associated with. Pick your favorite airline and favor your spending, travel and otherwise, toward building up miles.
• Are you super-organized? I'm not, but if you are, then you can get some hefty rewards — hundreds of dollars — by taking advantage of good promotions and following through on the terms. If you don't have credit card debt, then just sign up, follow the terms of the promotion, and profit. If you do have credit card debt, then you can look for low-interest balance transfer deals, pay your bills on time, and give your debt reduction efforts a much-needed shot in the arm. But again, this is only for super-organized people, as a missed payment, not spending enough, whatever, can make you ineligible for the good stuff of the reward — or worse, subject you to a penalty rate.
• Do you have several cards that you don't use anymore? Consider getting rid of the newest one that you don't use. Why? The length of your credit history the same (because you have at least one card older than the one you're canceling) and decreasing your available credit could help your score as long as you still have plenty of headroom to your available credit.

I'd consider having at least one backup credit card

I think my wife and I are pretty careful with protecting our card information.

But the fact of the matter is: security compromises happen. I'm convinced that fraud will never go away completely; there will never be a shortage of people who want to take the easy way out and steal from someone else.

So, when — not if, when — a hack appears to have happened, your credit card company will often block further transactions until you contact them.

Sometimes there are false positives; if you go on travel then your normal pattern of spending is changed and you could trip a flag in their system. Other times, there actually is a hack, and they'll need to issue you a new card.

They get the card to you pretty quickly, but not instantly. For those few days, you don't have your card.

It's for that reason that I suggest you strongly consider having at least one backup card so that you can make purchases. (At one point, we had two cards with fraudulent activity at the same time; fortunately we had a third card that we could use! Hopefully, that won't happen again.)

What thought process did you go through when applying for your credit cards?