To ensure you receive the best service possible,
please enter your zip code below:
The number of credit cards you choose to have is an important personal finance decision. Factors like your spending habits, current debt and credit report may influence whether or not you choose to open a new credit card—and if you qualify for one. Why does the number of credit cards you have matter? Your credit profile is a large part of your digital identity, which includes a record of your financial activities.
And one of the factors that contributes to your digital identity is the number of credit cards you have in your name.
While there isn’t a specific ideal number of credit cards you should have, there are several variables to consider when it comes to opening an additional card.
For example, having fewer than five credit accounts (not just cards, but also other types of credit, such as loans) can make it difficult for the three credit bureaus—Experian, Equifax or TransUnion—to assign you an accurate credit score. Lower scores affect the interest rates you’re granted for auto loans, student loans, mortgages and more.
There are five important factors that determine your credit score, each of which has a specific percentage indicating how much it impacts your number.
How long you’ve had credit cards and how long you’ve made timely payments make up 35% of your credit score. If you’ve missed payments or made them late, your score will take a hit. And the more cards and loans you have, the more payment history there is to manage.
The amount of debt accumulated across loans and credit cards makes up 30% of your credit score. As with your payment history, more credit cards could mean more debt to manage. If you have a high debt-to-income ratio, your credit score will take a hit.
The amount of time you’ve had a credit card accounts for 15% of your credit score. This means that it may take some time for your new credit card to positively impact your credit score.
The range of loan types in your credit profile constitutes 10% of your credit score. So if you have a credit card, an auto loan, a mortgage or another type of loan in the mix and you’ve made your payments on time, your credit score should be positively impacted.
New credit makes up 10% of your credit score. When you open a new credit card, the application triggers a hard inquiry, which can have a negative impact on your score. New credit will also impact your credit history.
Learn more about earning a healthy credit score.
Read now
Think it makes sense for you to get a new credit card? Take these three steps before you apply.
Another way lenders establish your creditworthiness is through the debt-to-income (DTI) ratio. The ratio is determined by dividing by your gross monthly income by your monthly debt payments. Use this handy DTI ratio calculator to determine your ratio.
The lower percentage your DTI ratio, the more likely you are to get approved for a new credit card. Typically, lenders will look for a DTI ratio of 35% to 40%.
One of the best ways to improve your credit score is to pay off your credit card debt in a short period of time.
As you’re paying the debt back, strive to pay more than the minimum amount each month. While it may seem nice that the monthly minimum payment is low, remember that only a little bit of this payment goes toward the principal, and the rest goes to interest. The more you pay each month, the faster you can pay off the debt.
Another tip: Take advantage of any cash-back rewards you have on your existing cards. As you spend money and earn cash back, you can use that money you get back to help pay your debt.
You can also try these seven tips for paying off your credit card.
Stick with established credit card issuers such as American Express, Discover, Visa and AAA. And choose the issuer with the card that best suits your lifestyle and needs.
When looking into a specific card, ask these questions:
Some credit cards are great for cash-back rewards, while others help you achieve your travel dreams. Consider your goals for having a credit card and choose an issuer that has the perks to suit that goal.
You’ll find that most credit card issuers base your credit limit on your credit report and your gross annual income. If you’re just starting out in your financial journey, it’s common for the limit to be under $1,000, but there could be a significantly higher credit limit if you have a good credit score.
Some cards require an annual fee, but others don’t, and the amounts vary widely. However, with the right rewards program, the perks can make up for this fee and more.
Some cards offer sign-up bonuses, while others give travel rewards. Some cards grant you access to brand partnership discounts. For more ideas, consider these tips for making money via credit cards.
When applying for a new credit card, remember that each application triggers a hard inquiry. Sometimes also called a hard pull, a hard inquiry is when a lender or credit card issuer takes an official look at your credit score.
This matters because each time it happens, it’s noted on your credit report. If you have too many inquiries, it’s a red flag to lenders that your debt-to-income ratio may be high. Too many credit inquires can hurt your credit score, although one inquiry a year will not impact your score. If you need to man an inquiry more than once in a year, you can get free credit reports at Credit Karma with no impact to your score.
This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.
Annual Percentage Rate (APR)
We may change APRs, fees, and other Account terms in the future based on your experience with ACG Card Services and its affiliates as provided under the Cardmember Agreement and applicable law.
1Cash back can be redeemed in the form of a statement credit or ACH deposit ($25 cash back minimum redemption). Cash back is not earned on business related transactions or activities. You may not redeem cash back, and you will immediately lose all of your cash back, if your account is closed to future transactions (including, but not limited to, due to Program misuse, failure to pay, bankruptcy, or death). Cash back will expire at 11:00 p.m. Central Time on the last day of the calendar quarter that is five (5) years from the date on which they are earned. Account must be open and in good standing to earn and redeem rewards and benefits. Upon approval, please refer to your Cardmember Agreement for additional information. Cash back is earned on eligible net purchases. Net purchases are purchases minus credits and returns. Not all transactions are eligible to earn cash back, such as Advances, Balance Transfers, and Convenience Checks and other advance transactions as defined in the Cardmember Agreement, as well as interest charges and fees do not qualify. U.S. Bank cannot control how merchants classify their business or transactions and reserves the right to determine which Purchases will qualify in which category. Earn 2% per dollar for qualifying net purchases made with the card through any participating AAA Club when AAA is the merchant of record, on qualifying net insurance purchases (MCC = 6300) and at eligible retail travel merchants. AAA Clubs located in Northern California, Nevada and Utah are not participating AAA Clubs and purchases made at those clubs will not qualify for 2%. Earn 4% per dollar for qualifying net purchases on AAA purchases, travel and insurance for your first 6 months up to $6,000. After that, earn cash back in the standard 2% category. Foreign Transaction Fee: None.
2 Benefits are subject to terms, conditions, and limitations on the amount of coverage. Travel and Emergency Assistance Services help in coordinating medical, legal and travel services while away from home. Rental Collision Damage Waiver coverage and peace of mind for damage due to collision or theft of most rental cars. Certain terms and conditions apply. Please refer to your Visa Guide to Benefits for details
The Contactless Symbol and Contactless Indicator are trademarks owned by and used with the permission of EMVCo, LLC.
This card is issued by U.S. Bank NA dba ACG Card Services, pursuant to a license from Visa USA Inc. Equal Credit Opportunity Lender
*Annual Percentage Yield (APY) is valid as of 11/26/2024. Personal accounts only. Rates are variable and may change without prior notice. $100 minimum balance to open and avoid fees. Fees may reduce earnings. $250,000 maximum opening deposit when account is opened online. After online opening deposit is verified, you may deposit additional funds to your account. $500,000 maximum balance. Auto Club Trust, FSB.
**Annual Percentage Yield (APY) is accurate as of 11/26/2024. Rates are variable and may change without prior notice. Interest rates are fixed until initial maturity after the account is opened. A $1,500 minimum deposit to open the account and obtain the APY is required. A penalty may be imposed for early withdrawal. Fees may reduce earnings. Personal accounts only.
†Annual Percentage Rate (APR). Rates and terms effective as of 10/11/2024. APR is accurate as of 10/11/2024. Advertised rates and terms are subject to change without prior notice. Additional terms and restrictions may apply. Other loan rates available. Subject to borrower qualification. Advertised rate includes a 0.25% discount when you set up automatic payments from any checking or savings account. Rate is variable. Offer valid on personal vehicle loans only. Criteria to receive the stated APR: Loan term 48 months or less new or used, model year 2018 – 2024 with a credit score of 720 or higher based on the Vantage scoring model. Buyer is responsible for all state or local fees. Auto Club Trust, FSB uses a managed credit program and final APR is dependent on your credit score. An auto loan with an APR of 5.49% for a $20,000 loan at a term of 48 months, your estimated monthly payment would be $465. An auto loan with an APR of 5.74% for a $20,000 loan at a term of 48 months, your estimated payment would be $467. Private party sales will not be financed.
††Terms and Conditions apply. Offer valid for loans on vehicles purchased through the AAA Auto Buying Program from a TrueCar, Inc. (TrueCar) Certified Dealer; and approved and funded by Auto Club Trust, FSB. Applicant must submit the Member Price Summary provided by TrueCar during the application process. Must be an active AAA member to receive the additional TrueCar discounted rate. Loans offered by Auto Club Trust, FSB. Equal Opportunity Lender.
Member Savings currently not available in all states. In these states a "Target Price" is presented, which reflects a market-based example of what you can reasonably expect to pay for a vehicle configured with your desired options. Your configured vehicle may not be available or in-stock at the Certified Dealer.
TrueCar operates this information website ("Service") featuring pricing, performance, technical, and safety data available for new and used vehicles. The Service is not available in all locations.
Products are offered by Auto Club Trust, FSB. Equal Credit Opportunity Lender.
Mortgages originated by Auto Club Trust, FSB. Equal Housing Lender. NMLS# 799629
Member FDIC
