Certain credit cards are tailored to having better rewards for certain purchases
One large advantage of having credit cards are the cash back rewards and travel miles you can earn from spending on them. Lots of people use specific cards for specific reasons. In the Reddit post below,
the user explains the specific uses of the cards they own.
“I have many credit cards to my name but keep 9 in regular rotation for cash back purposes:
- Citi Double Cash: 2% cash back
- Verizon Visa: 4% groceries and gas
- Bank of America Visa & MasterCard: 3.3% online purchases (3% + 10% bonus for depositing into a BoA account. Each with $2500 quarterly limit on boosted rewards)
- Capital One Savor: 3% restaurants
- Amazon Visa: 5% at Amazon
- Target Red Card: 5% at Target
- Delta AmEx: Free check bag + marginal perks
I prefer cash back to miles, so I’ve developed my system based on that. I also prefer to keep cards with no annual fee, so that I’m not bound to commit to a certain usage % in order to make that card worth my while.
Over the past few years, I’ve opened cards primarily for the welcome bonuses, but I’ve slowed down on that since 2 years (partially because those deals have become more scarce).
My FICO right now is 786 and has fluctuated +- 20 pts over the past few years. Anything 740+ makes you a prime lendee and it doesn't bother me as long as I have a 20 pt cushion from the 740 floor.”More cards can help lower your credit utilizationThe Reddit post quoted below
, explains how more credit cards can help lower your credit utilization and potentially increase your credit score.
“There's a lot of good information in these comments, and I want to hop in to clarify a couple of things. The majority of places that care about your credit score tend to use the FICO scoring model.
35% of the FICO score is comprised of your payment history - not how long your payment history is, but how consistently you pay on time.
30% of your score is your utilization rate - the ratio of how much you owe to how much credit you have (under 10% utilization is ideal, but under 30% is still considered good).
Only 15% of your score is based on your length of credit history. Also, closed accounts remain on your account for 10 years, and will still contribute to your credit history length.
I know you didn't ask specifically about all of that, but I thought it might be useful when weighing your options with different credit cards.
Basically, having more credit cards doesn't hurt your score. It will increase your credit limit, which will help bring down your credit utilization (assuming you still spend the same as before). It could potentially also help you down the road with the average age of your accounts in certain circumstances.”