Can You Have Too Many Credit Cards?

The short answer is yes. Credit has never been more accessible than it is today. Pre-approved credit card applications are now routinely sent to children — usually by mistake. You can also get credit card approvals almost instantly over the Internet. Before you know it, you could have five or more cards in your wallet.

Having multiple business credit cards signals lenders that you have the potential to get over your head in debt fast. It may also cause banks to decline you for other types of loans, knowing that you already have a sizeable chunk of cash available on your credit cards.

These are just a couple of reasons why it's a good idea for a business not to have more than two or three credit cards. Two cards are a good idea to help keep business and personal expenses separate. You might also benefit from a second business or corporate card. But more than three credit cards can become unwieldy. Grace periods differ and you may find yourself paying unexpected fees and penalties if you tend to carry balances.

Simplify your life. Fewer cards will help you more easily and efficiently monitor your spending, and can also help you avoid deceiving yourself about how much you owe. In the long run, having fewer cards will minimize the interest you're likely to pay.

If you find yourself in need of more credit, just ask your credit card company to increase your limit. Depending on your needs, you might also consider a line of credit or another type of business loan before sending in yet another pre-approved credit card application.