Over the last few years, my husband and I have signed up for dozens of new credit card accounts.  I’m sure that probably seems pretty extreme, but it’s really not when you consider the fact that our credit cards are spread across our two personal credit profiles and three separate businesses.

Maybe I’m just nuts, but I actually think doing things this way makes our life easier, not harder.  For example, having separate business credit cards helps us keep all of our business-related purchases separate for tax purposes.

Still, it’s a lot to keep track of which is why I keep a credit card rewards spreadsheet with all of the important details.  Not only does my spreadsheet help me keep of track of when I opened new accounts and when I should cancel them, but it also helps me keep my credit score in good shape.

Although I don’t stress out over my credit score, I still don’t want to ruin my credit.  After all, you never know when you’ll need to use credit to buy a new house, purchase an investment property, or buy a business!  Anyway, I recently received this reader question via Twitter and thought it deserved an answer:

“Doesn’t having several rewards cards ruin your credit?”

Tina J.

Will Pursuing Credit Card Rewards Ruin Your Credit?

A lot of skeptics will tell you that pursuing points and miles will ruin your credit score over time.  I’m proof that it isn’t true.  In fact, I currently have 50 accounts according to TransUnion and, as you can see from the screenshot below, one of my scores recently climbed back over 800.  The reason I have been able to keep a strong credit rating while pursuing so many rewards is because I have a strategy when it comes to applying to new cards and I am 100% debt-free and a total freak about staying that way. 


hollys screenshot credit karma

To decide your credit score, credit reporting agencies use several criteria including your payment history, how much you owe, the length of your credit history, new credit, and the types of credit used.  Here’s how it breaks down:

  • Payment History: 35 percent
  • Amounts Owed: 30 percent
  • Length of Credit History: 15 percent
  • New Credit: 10 percent
  • Credit Mix: 10 percent

Although opening new accounts will temporarily cause your score to drop a few points, doing everything else right seems to be enough to keep you in good standing.  For example, you should always pay your credit card bill in-full, even if that means paying several times a month to stay on budget.  {Newsflash: No matter what, going into debt to pursue rewards is always a bad idea}.  Second, you should try to keep at least one old account open.  Doing so can help improve the average length of your credit history.  Third, you should always pay your bill on time.  Never pay anything late!

My Credit Card Rewards Strategy

Developing a credit card rewards strategy takes time. Here’s how I pursue so many points and miles while keeping my credit score over 800:

  • I only open new accounts every 3 or 4 months.  Every time I open a new credit card account, my score drops a few points.  Waiting 3 to 4 months between applications gives it time to rebound.
  • I monitor my spending like a hawk.  A lot of people feel that credit cards cause them to spend more, but I actually feel the opposite.  Using credit makes it easy for me easy to monitor all of our purchases online.
  • I pay my credit card bills 3-4 times per month.  Since we use a zero-sum budget, I pay our credit card bills about once per week so we can stay on track.  And once our spending limits are gone, they’re gone!  Always keeping our balances near zero also keeps our utilization as low as possible.
  • I monitor my credit on Credit Karma.  Credit Karma helps you monitor everything that affects your credit score.  Better yet, it’s free!

Should Everyone Have a Ton of Rewards Credit Cards?

Obviously, the number of rewards cards you have should depend on your own comfort level.  I like to take the hobby to the extreme, but most people would be much better off getting one or two excellent rewards cards and using them for their everyday spending.  It takes a lot of time and effort to stay organized when you have more than a few cards, and most sane people would probably rather spend their time doing other things!

Still, you shouldn’t let anyone tell you that signing up for a handful of rewards credit cards will ruin your credit.  It simply isn’t true, and I get tired of hearing people say that it is.  Just use your best judgment and some common sense before you open any new accounts.  Only you know what makes sense for your specific situation.

Make sure to check out my NEW Free Travel Rewards Advice Page!

Did your credit score take a dip when you started pursuing points and miles?  How did you decide how many cards you feel comfortable with?

Additional reading: