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With many people considering whether to open a new credit card to spend more during the holiday season and into 2024 a new report sheds light on the States With the Most Credit Cards.

Credit cards can help you save hundreds of dollars on gifts and festivities, especially if you earn an initial bonus. However, it’s also easy to fall into the temptation to open a new card just to spend beyond your means – and that can spell trouble for your credit score.

More Than Some

In some states, people have a lot more open credit cards and are opening them at a faster rate than in other states, and Alaska ranks first in the personal-finance website WalletHub’s new report on the States with the Most Credit Cards. The rest of the top five were New Jersey, Nevada, Wyoming, and Arkansas. To create its ranking, WalletHub analyzed the average number of cards owned per person and the average number of new cards opened per person in Q3 2023, as well as the percent change in both of those numbers from Q3 2022.

“Alaska residents increased their average number of cards owned by over 8.5% compared to last year, more than in any other state. Alaskans also opened 5.44% more new cards in Q3 2023 compared to Q3 2022, while residents in most states decreased the number of new cards opened,” said Cassandra Happe, an analyst at WalletHub. “The good news is that Alaskans seem to be able to handle their new credit cards. Although Alaska residents have a high average credit card debt, they also have good credit, on average, and they don’t have high levels of financial distress.”

New Jersey, the second-ranked state, has the highest average number of credit cards owned per person, at a whopping 5.85. However, people in the state have slowed down on opening cards during the most recent quarter. Since New Jerseyans have a high number of credit cards, it’s unsurprising that they also have one of the highest household credit card debt levels in the country.

Nevada is one of the 18 states where people own more than credit cards on average (5.4), and its residents increased their cards owned by 6.8% year over year, one of the highest increases in the U.S.

States With the Most Credit Cards

Most Credit CardsFewest Credit Cards
1. Alaska41. South Dakota
2. New Jersey42. Kentucky
3. Nevada43. Wisconsin
4. Wyoming44. Hawaii
5. Arkansas45. Oklahoma
6. Florida46. Vermont
7. Georgia47. Idaho
8. California48. Montana
9. Arizona49. Nebraska
10. Delaware50. Iowa

“Some people can effectively manage more credit card accounts than others. Having multiple credit cards in your wallet is good for your credit score if you pay on time and in full, keep your credit utilization low, and wait at least six months between applications,” Happe said. “The problem arises when people open new cards simply to overspend, as many people do during the holiday season. That can lead to unsustainable debt and credit score damage.”

When figuring out how many credit cards you can manage and whether to open a new one, there are a few helpful tips you can follow to make sure you protect your credit score and your wallet.

Tips for Managing Multiple Credit Cards Responsibly

  • Never open a card to spend beyond your means: When you open a new credit card, you should strive to only charge what you can pay in full each month – or at the very least, what you can afford to make monthly payments on. The exception is cards with long 0% introductory APRs, which you can use for financing big purchases that you can’t afford all at once. It’s best to only use them if you can pay most or all of the balance off during the promotional period, though.
  • Wait at least six months between applications: Every time you apply for a credit card, it triggers a hard pull of your credit report, which causes a slight drop in your credit score (usually around 5-10 points). Applying for multiple cards in a short period can compound this damage and make it take longer for your score to bounce back.
  • Ask for credit limit increases: If you need to spend more, and can afford to do so, asking for a credit limit increase on an existing credit card account may be easier than applying for a whole new account. There’s still a chance it will lead to a hard inquiry, but you also won’t have to worry about making separate payments on a new card.
  • Use different credit cards for different things: The “island approach” is a strategy where consumers have several credit cards and use them for different purposes. For example, you might use one card for 0% financing, another for cash-back rewards on everyday purchases, and another for travel. When you have more than one credit card in your wallet, each should provide different benefits.
  • Set up automatic payments: The more credit cards you have, the easier it becomes to forget to send a monthly payment. Setting up automatic payments from a checking account eliminates that problem, as long as you keep enough money in the account.

Full report visit here.

Source: WalletHub