Do Multiple Credit Cards Have An Effect On Your Credit Score?

25 April, 2023

Credit cards have made our lives a lot easier. Whether shopping online or at a brick-and-mortar store, you can pay for your purchases with a credit card within seconds. Often, you might find yourself having multiple credit cards at the same time. While this can help you separate expenses and make payments, what happens to your credit score? Is having multiple credit cards good or bad in India? Or does it make no difference to your credit score? Let’s find out.

How Does Having Multiple Credit Cards Affect Credit Score?

You must be aware that how you use your credit card impacts your credit score. For instance, your credit score might deteriorate if you continuously fail to repay the amount due on time. On the other hand, consistently repaying the due amount on time and help you boost your credit score. But what happens to your credit score when using multiple credit cards simultaneously?

• Payment History:
  
  You might not be aware of this, but your payment history accounts for a major part of your credit rating. This figure encompasses all your debt, but especially credit card debt. Credit card issuers often report even a day’s default to a credit reporting bureau. Thus, you have to be careful about managing your credit card dues. Make sure to pay them off regularly and on time. However, this factor is not affected by you using multiple cards in itself. You will simply have to be mindful of the due dates and make the payments for each card.
  
  

• Debt-to-Credit Limit Ratio:
  
  Again, your debt-to-credit ratio accounts for a significant part of your credit rating. This ratio is calculated by considering your outstanding debt against the credit made available to you. Thus, your credit rating will be negatively affected if this ratio exceeds 30%. When you have multiple credit cards, this ratio is initially positively affected. This is because multiple credit cards have extended the credit you can rely on. However, to maintain your credit score at this level, you have to make an effort to keep your credit utilisation ratio below 30%.
  
  

• New Credit:
  
  New credit accounts for a small part of your credit score. This means that anytime a new line of credit is extended to you, your overall credit score reduces. This happens because new credit leads to an increase in credit risk. Unfortunately, this aspect of your credit history will always be negatively affected each time you opt for a new credit card. If you end up with many credit cards, you will draw negative attention to your credit score. Thus, gradually opt for new credit cards after allowing your credit score to recover.
  
  

• Credit Type:
  
  Normally, having a single type of credit hurts your credit score. Thus, you should keep a diverse credit portfolio, including mortgage, auto loans, instalment loans, etc., to keep your credit score in good health. If your credit portfolio is already diverse, you can opt for multiple credit cards without negatively affecting your score. However, if you only have credit cards in your portfolio, each card will have an adverse effect, especially regarding this factor. All in all, diversify your credit portfolio as it benefits you in the long run.
  
  

• Credit History Length:
  
  Your credit history length also influences your credit score. To keep this score healthy, you have to make payments on time. The trick to doing this is to keep a longer average of your credit account. When you add new credit cards, this score will drop and negatively affect your credit score. Thus, you should try to introduce new credit cards with less frequency and only when you have a requirement to do so. This is why when you opt for credit cards, make sure to pick those that will meet your requirements and offer additional perks. As a basic rule, try to limit the number of credit cards you have active to three or less at a given time.
  
  HDFC Bank has you covered with various credit card options that can meet your tailored requirements. Our Regalia Credit Card is designed to help you make payments more efficiently, especially when your shopping bills include luxury purchases. You can also access additional benefits like revolving credit, lounge access, dining benefits and much more!
  
  

Now that you know the answer to the question ‘does multiple credit cards affect CIBIL score’, do not hesitate and apply for the HDFC Bank Regalia Credit Card today!

Continue reading more about Reward Points – The Main Feature To Look For In Credit Cards!

Click Here To Apply For Your Credit Card With Us!

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.