How Many Credit Cards Should You Have in College?

This guest post was written by Go Banking Rates, bringing you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide.

Anyone tasked with paying for their college education knows that student loans only go so far. Unless you are one of the lucky few to obtain a free ride through all four years, you probably need a some way of covering extra costs. Even if you don’t need the money, you still need to build credit for your post-university life. That’s why most college students are interested in getting a credit card.

The truth is, you likely don’t need a credit card while in school, but that’s another discussion all on its own. As of a few years ago, 75 percent of students have credit cards, so obviously, you’re intent on getting a credit card now. If that’s the case, what’s the maximum number of cards you should open? The answer is simple: As few as possible.

You Can Have Too Much Credit

One of the main arguments among most young adults seeking credit cards is that they need to establish a credit history and build up their score so they can eventually buy a house, new car, etc. This is true, but a slew of credit cards won’t aid you in this venture.

A credit score is comprised of a variety of factors, all weighted differently in the calculation. About 10 percent of your score is determined by the amount of new credit you have. The more recent and more plentiful your available credit, the lower your score gets.

This is because a rash of applications signals to creditors that you may be relying on credit too heavily. They see your multiple accounts as an indicator you’re more likely to default on a payment. Even though you may have obtained these cards over the course of a couple years, which seems like a long time to you, it’s a very short history compared to someone with a credit history of several decades.

Credit Cards Really are for Emergencies Only

Do you recall the advice that credit cards should only be used in a financial emergency? Did you know that’s a true statement? Hopefully, someone explained this to you at some point. Unless you plan on experiencing an alarming number of emergencies, there’s no need for more than one credit card.

Young adults often fall into the trap of running up a balance they can’t afford to pay off and then falling deeper into debt as a result. Don’t do this to yourself–you have plenty to worry about without adding to your financial woes.

As long as you use your card responsibly throughout your college career and take advantage of the multitude of other ways to build credit, like co-signing on a loan or being added as an authorized user on someone else’s card, you should graduate with a pretty healthy score. You can then start adding on different forms of credit and opening more cards when your bills actually warrant a larger line of credit.

(photo credit: bisgovuk)