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How many credit cards do you need? A Boston Fed report found that 75 percent of U.S. adults said they have one credit card, but the average is actually 3.4 cards per individual.

Credit cards can help you establish a credit history and reward your spending with cash and other perks. However, it's important to practice discipline and not take them for granted. If the cardholder racks up debt that isn't paid back, it can hurt their credit score.

How many credit cards one owns depends on their financial situation and debt loads. Those working to reduce debt will have different credit card needs than those in good standing.

The Credit Sweet Spot for Those in Debt

Let's start with consumers who are in debt. Foregoing credit cards altogether isn't always an option — nor should it be. Without one, it is difficult to build a credit history and without that, you won't be eligible for mortgages, auto loans, and even some jobs. According to Experian, people with debt should start with two credit cards from different card issuers. That should be enough to keep a credit score high and provide a backup to the main card in case of an emergency.

For some debt holders, improving their credit score can be achieved by opening more cards. When determining your credit score, and thus the interest rate you'll pay on loans and credit, companies look at the credit utilization or the ratio of credit card balances to credit limits. That should be under 30 percent but the lower it is the less interest you'll pay. If you keep it below 10 percent, you'll earn the highest credit score.

How to Check Your Credit Utilization

To determine if you are in that sweet spot in terms of credit utilization, calculate an average of your credit card balances for 12 months. Your available credit should be ten times that amount to hit a ratio of 10 percent. If the credit limit is under 10 percent, opening more credit cards can get you to the optimal amount. Consumers can also request a credit limit increase on the cards they already have. Keep in mind that credit cards, even ones that go unused, can carry fees.

Good Credit & More Cards Mean More Rewards

For consumers who have stellar credit and pay off their balances each month, the sky's the limit in terms of credit cards they can utilize — assuming there aren't fees associated with them and they use them responsibly. That means paying the bill on time each month, keeping your spending in check, and not racking up a lot of debt. There are benefits beyond improving the credit utilization rate to owning multiple cards. Competition in the credit card market is fierce, which means the card issuers are willing to dangle generous rewards to land consumers as customers. From high cash back sign-on bonuses to generous travel rewards, consumers can maximize their bonus perks by strategically opening and using credit cards.

Buyer beware: rewards cards can come with higher interest rates so consumers should aim to pay them down each month. A telltale sign that you may have too many credit cards is when you're paying fees for rewards you aren't using.

Credit cards are a mainstay of life for millions of Americans, and for good reason. They enable you to build and improve your credit, can cover you in an emergency, and even reward you for using them responsibly. How many you should utilize boils down to your debt load, spending habits, and your ability to pay them back.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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