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Whether you’ve noticed a potentially fraudulent charge or you simply changed your mind on a purchase, there are a number of reasons why you might want to cancel a credit card payment. Luckily, there are actions you can take to do so, assuming the payment falls within certain parameters.

Read on to learn how to cancel a credit card payment, whether the charge is still pending or if it’s already posted. You’ll also learn how to stop payments on credit cards if you don’t want your scheduled payment to go through.

Can You Cancel a Credit Card Payment?

Per the Fair Credit Billing Act (FCBA), a law that all credit card issuers must follow, there are times when you can withhold a payment. So if you define “cancel” as disputing a charge instead of making the payment, there are instances when it’s acceptable under the law to cancel credit card payment.

You can also request to cancel a credit card payment if you believe it’s the result of fraudulent activity.

Related: How to Cancel a Credit Card

Things to Consider Before You Cancel a Credit Card Payment

Before you cancel credit card payments, it’s important to note that the previously mentioned FCBA guidance only applies when you believe a billing error was made. Per the Federal Trade Commission (FTC), examples of billing errors include:

•   Unauthorized charges

•   Charges with the wrong date or amount listed

•   Charges for items or services you didn’t accept or that weren’t delivered as agreed

•   Mathematical errors

•   When the credit card issuer didn’t post your payments or your returns/credits

•   When the credit card issuer didn’t send the bill to the appropriate address, assuming they were provided adequate notice of any change in address

•   Charges where you’ve asked for written proof of a purchase or an explanation of it, along with a claim of an error and a clarification request

Further, for disputes about goods and services, you generally must have made the purchase on your credit card in your home state or within 100 miles from your home for the laws on credit card disputes to apply. The charge in question must be for more than $50. Credit card rules stipulate that it’s also necessary to have made an attempt to resolve the issue with the merchant first.

Recommended: What Is a Charge Card?

Reversing a Credit Card Payment After It Has Been Made

If you’ve already paid the merchant but are unsatisfied with how they’ve responded to your complaint, contact your credit card company to see if you can get the charge reversed. They may call this a chargeback.

Parties that will get involved in the process, besides you, can include your credit card issuer, the merchant from whom you purchased goods or services, the merchant bank, and the credit card network. This is due to how credit card payments work.

Typically, you’ll receive credit on the disputed amount while an investigation takes place. If you win the billing error dispute, this credit card refund will remain permanent. If the case isn’t decided in your favor, then the amount would get added back to your credit card balance.

Recommended: When Are Credit Card Payments Due?

How to Cancel a Credit Card Payment After It’s Made

If you’re hoping to cancel credit card payment, here are the general steps you should go through to do so.

Attempt to Resolve the Dispute With the Seller

As an initial step, contact the seller of the item you’re unhappy with and explain the situation. It’s possible, for example, that you received the wrong item or a part may have been defective in what you received. Perhaps they can send you a replacement. Or you can ask the seller to reverse the charges on your credit card, resulting in a credit card refund.

Avoid Paying the Disputed Amount

If you don’t get satisfaction by working with the merchant, you can decide to not pay the disputed amount and have the situation investigated. To make that happen, though, you need to follow specific steps, starting with reaching out to your credit card issuer.

Contact Your Credit Card Issuer

Write and send a letter to your credit card issuer that outlines the billing error and disputes the charge. Your credit card company should have a billing inquiry address listed on its website.

Make sure to send this letter within 60 days of receiving the billing statement with the disputed charge. Keep copies of the letter, and consider sending it via certified mail with a return receipt.

Await Your Credit Card Company’s Decision

Then, you wait. The creditor has up to two billing cycles — a maximum of 90 days — to resolve the dispute. The result may be that you don’t have to pay the disputed amount, or that you do. Or, you may end up needing to pay part of it.

If you have reason to believe that the creditor isn’t following the rules set out by the FCBA, you have the right to sue them. If you were to win, the court may award you damages and order the credit card company to pay your attorney fees.

Understand the Limitations

After you’ve filed a dispute, you aren’t required to pay the charge in question until after the investigation ends and a decision is made. That said, you are required to pay whatever else is owed on this bill — such as a credit card minimum payment or finance charges on the undisputed portion of the bill. And, of course, remember there’s no guarantee that you would win a lawsuit.

Recommended: What Is the Average Credit Card Limit

How to Stop Payments on Credit Cards

Perhaps you want to know how to stop a scheduled payment on a credit card that hasn’t already been made. In this case, you’d need to contact your bank at least three business days before the payment is set to come out. Do so in person, in writing, or over the phone. The financial institution may require a follow-up of this request in writing within 14 days.

Note that, even after the bank stops a payment, you may still be responsible for making the payments to the credit card company; that’s part of using a credit card responsibly. Here are some other general tips to keep in mind for the process of stopping payment on a credit card.

Identify the Credit Card Payment You Want to Cancel

When you contact your bank, make sure you’re clear about which payment you want to cancel. If you only have one automatic payment taken out, this wouldn’t apply.

Check the Restrictions That May Apply

Be clear about whether your stopped payment falls within your FCBA rights. Remember that you’re still liable to pay your credit card bill outside of any disputed charges.

Contact the Credit Card Provider to Stop the Pending Payment

If you want to contact your credit card company to stop a pending payment, use the phone number on the back of your card. You can then talk to someone about stopping the payment.

Verify That the Payment Has Been Canceled

Whether you talk to your financial institution or the credit card company, ask for the name of the person you spoke to and a confirmation number. Take good notes and keep them. Later, you’ll want to check back to make sure that the payment was indeed canceled.

What to Do in the Case of the Non-Reversal of Funds

If you aren’t satisfied with how your credit card company is handling a situation, you can submit an online complaint online to the Consumer Financial Protection Bureau (CFPB) or call them at (855) 411-2372.

Also keep in mind that if your dispute was denied, you can request an explanation from your credit card company. You also have the option to appeal the decision.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

It is possible to cancel a credit card payment if it falls within your FCBA rights or it’s due to fraudulent activity. There are protections built into the law for when you receive erroneous billing, as well as an established process to follow to address this issue. In the meantime, you’re still liable to make minimum payments outside of the disputed amount.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can I cancel a pending transaction on my credit card?

Possibly. Contact the merchant and ask them to cancel the transaction. Aim to do so in the day or two before the pending charge is added to your balance. Once it’s posted, then you would need to pursue another route, like filing a dispute or asking for a chargeback.

Does canceling a credit card payment affect your credit score?

If you dispute a charge, it may show up on a credit report, but it shouldn’t directly affect your scores. The FCBA notes that it’s not legal for someone to be denied credit because they disputed a bill. That said, to avoid your credit score getting dinged, you must keep up credit card payments outside of the disputed amount.

How long does it take to cancel a credit card payment?

You should provide at least three days’ notice before a bill is set to be taken out of a bank account. That should provide adequate time for the cancellation of the credit card payment.

Photo credit: iStock/solidcolours??

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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The average credit card annual percentage rates (APR) topped 21% as of the middle of 2024, according to the Federal Reserve. It’s no wonder that savvy cardholders are looking for ways to reduce the cost of using a card. Some ways consumers achieve this is through a cash-back rewards credit card or a low-interest credit card.

The distinction between a cash-back vs. low-interest credit card is that cash-back cards help you earn a small percentage of your spending back. Conversely, a low-interest credit card tends to charge less interest each month than a high-interest card, which is helpful for cardholders who roll a balance into the next month.

What Are Cash-Back Credit Cards?

Credit cards that offer cash-back rewards are designed as an incentive to encourage spending on the card. For every eligible purchase you charge to your card, you’ll receive a small percentage of cash back. Some cards offer 1% cash back, while others offer as much as 6% or more, depending on the program’s rules. You might earn a flat rate across all purchases, or you might earn more in certain spending categories, such as groceries or gas.

You then can redeem your earned cash-back rewards. Redemption options may include a cash payment or a statement credit toward your next bill, or you may be able to redeem the rewards for travel, merchandise, gift cards, and more.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

What Are Low-Interest Credit Cards?

Low-interest credit cards incur a lower borrowing cost compared to a high-interest credit card. A credit card that charges low interest allows you to pay less for using the card if you carry a balance. This card feature is beneficial for cardholders who repay their monthly balance in increments over time, instead of in full.

The interest rate you qualify for highly depends on your creditworthiness, including your past borrowing habits and credit score. Consumers with strong credit might qualify for promotional no-interest credit cards that charge 0% APR for a limited period. After this period is over, the card’s interest rate increases, based on the cardholder’s credit and qualifications. As such, there are both advantages and disadvantages of no-interest credit cards.

Recommended: How to Avoid Interest On a Credit Card

Differences Between Cash-Back and Low-Interest Credit Cards

Below are the key differences between low-interest vs. cash-back credit cards to keep in mind when choosing a card:

Factors to Consider When Choosing Between Rates and Rewards

Your unique financial situation, borrowing habits, and the features and benefits of a particular card are what you should consider when comparing your options.

Average Balance You’ll Be Carrying Monthly

How credit cards work is that they give you purchasing power up to a limited amount, even when you don’t have the cash upfront. You can choose to repay the debt in one lump payment by your statement due date, which allows you to avoid paying interest charges. Alternatively, you can make installment payments over multiple months, in which case you’ll accrue interest charges.

Not carrying a monthly balance is one of the common credit card rules to try to stick to, but it’s not always possible. For example, you might have had an unexpected injury that resulted in a medical bill that exceeded your cash savings. In this scenario, putting some of that cost on your credit card and making small, monthly payments to repay it might be necessary.

If you don’t have sufficient cash savings or income to confidently repay your monthly balance in full each month, a low-interest card might offer an advantage over a cash-back card.

Recommended: When Are Credit Card Payments Due?

Your Average Monthly Spending

Look back at your monthly expenses and think about the total amount you’ll likely put on your credit card each month. For example, you might choose use a credit card to cover everyday expenses, like dining, groceries, and gas. Cardholders who rack up high monthly balances can benefit from a cash-back credit card that offers money back from purchases you’re already making.

The caveat, however, is if you charge more expenses to your card than you can realistically pay back in full by the statement due date. If you roll over any portion of your outstanding balance into the next month, you’ll get charged interest on that amount, which cancels out any cash-back rewards you may have earned.

Recommended: Tips for Using a Credit Card Responsibly

Annual Fees

Some cards — particularly rewards cards that extend high-value benefits and incentives — might charge an annual fee. For example, a cash-back card might offer an annual $300 travel credit and 5% cash back on flight purchases, but charge an annual fee of $550.

If you don’t travel enough to use up the credits and earn more cash back than the annual fee costs, that card might not be the best fit for your lifestyle. You’ll need to assess the total potential dollar value that a card’s benefits, credits, and other incentives offer in comparison to the upfront cost of the card’s annual fee.

Interest Rate Difference Between Cards

Although all credit card issuers check your credit to determine your interest rate, each card company has its own underwriting criteria. You might receive an interest rate offer for 19.99% APR for one card, and an offer from another card issuer at 22.99% APR, for example. To gauge interest rates, it can be helpful to look at the current average credit card interest rates for a point of comparison.

Regardless of whether you end up with a cash-back credit card vs. low-interest credit card, it’s always a good idea to shop around for the lowest interest rate you can get. That way, if you ever need to carry a balance, you can minimize the amount of interest you end up paying.

Guide to Lowering Your Credit Card Interest Rate

Whether you’re shopping around for a new credit card or have an existing card with a high APR, here are some ways to lower your interest rate:

•   Contact your card issuer. If you’ve been a loyal customer and have kept your account in good standing, or if you have built your credit score since you opened the account, your credit card issuer may be willing to reduce your rate.

•   Build your credit score. Even if you already have good credit, building your credit score can help you secure the most competitive interest rate in the future. Good borrowing habits — like making on-time payments and keeping your credit utilization low (below 30% or ideally below 10%) — are just some ways that may help your score.

•   Consider a low-interest balance transfer card. If you have a high-interest card with a balance on it, and you have strong credit, a balance transfer card can allow you to move your original balance onto a low-interest card. Before proceeding, always compare the balance transfer fee against your potential savings to confirm that it’s worth it.

Remember, what’s considered a good APR for a credit card is subjective, based on your creditworthiness and other factors. Securing the lowest APR that you qualify for can help you avoid heavy interest charges if you roll over a monthly balance.

The Takeaway

Ultimately, whether you opt for a cash-back credit card or a low-interest card depends on how you plan to use the card and manage debt, as well as what kinds of perks and features matter most to you. If you often carry a balance, for instance, a low-interest card could be valuable. If you tend to follow the important rule of paying off your card balance in full every month, then interest rate may not matter as much but cash back could be a benefit you appreciate.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

When is a lower annual interest rate better than a low annual fee?

A lower APR is better if you typically carry a balance from one billing cycle to the next. When you roll over a balance, old and new balances accrue daily interest charges that can cost you more money out of pocket. A low annual fee is something to look for when you’re using a card to earn incentives, like credit card rewards.

Are there credit cards with low interest and cash back?

Yes, there are credit card options that offer a low interest rate to qualified applicants, as well as cash-back rewards. However, you’ll generally need to have good credit in order to qualify for the most competitive rates offered by low-interest rewards credit cards.

How can I choose between low APR and rewards?

Consider your credit history and score to determine whether you meet the minimum qualifications for a credit card’s lowest APR. Also, examine your general credit card habits, like whether you often roll over a balance and what your monthly spending habits are like. Compare those details against the costs of carrying a card, like annual fees and the APR you’re offered.

Is it better to find a credit card with low or high interest?

Finding a credit card that offers a low interest rate is usually the better move. The lower your APR, the less you’ll pay for borrowing on credit if you decide to carry a balance month to month.

Photo credit: iStock/AsiaVision

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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The lower your credit utilization — meaning the less of your total available credit you’re using — the higher your credit score could be. Typically, the rule of thumb is to use no more than 30% of your credit limit on your credit cards, and using only 10% or less is considered even better.

Here’s a closer look at how credit utilization affects credit score, from how much lowering your credit utilization will affect your score to how long credit utilization affects a score.

What Is Credit Utilization and Why Does It Matter?

Credit utilization is the percentage of your overall credit limit that you use on your revolving credit accounts — most commonly, credit cards. In other words, it’s how much of your available credit you’re using.

Credit utilization is one of the most important factors that scoring models look at when calculating your credit score, since it suggests the risk you could pose as a borrower. The lower your credit utilization, the more it will appear that you can handle debt or use a credit card responsibly. Thus, a lower utilization rate can contribute to a higher credit score.

To calculate your credit utilization, add up all of your credit card balances and then divide that amount by your overall credit limit across your credit cards. You would then multiply by 100 to express the ratio as a percentage. 

Here’s an example:

•   Say you have three credit cards, with an overall credit limit of $15,000. 

•   Next, imagine you’re carrying a balance of $4,000 across all of those cards. 

•   Using the previously explained equation, you divide your total balance of $4,000 by $15,000, and then multiply by 100.

•   Your credit utilization would be around 26.7%.

Factors That Affect Your Credit Score

Aside from your credit utilization, there are other factors that affect your credit score. These include:

•   Payment history: Another major factor aside from credit utilization is whether you pay your credit and debt accounts on time, meaning by the payment due date. If you consistently make on-time payments, the more creditworthy you’ll appear, and this will reflect on your score.

•   Credit history length: Credit scoring models typically take into account how long your current accounts have been open. They may even consider how long it’s been since you’ve used certain kinds of accounts. Generally, a longer credit history is a positive thing for your credit score.

•   Credit mix: Having different types of accounts may demonstrate to lenders how you handle different kinds of debt and can have a positive impact on your score if you manage your debts well.

•   New credit: Opening multiple credit accounts or having a series of hard inquiries could signal to lenders that you pose a greater risk as a borrower. As such, it may negatively impact your credit score.

How Credit Utilization Affects Your Credit Score

Your credit card utilization accounts for 30% of your FICO® credit score, which is the scoring model used by the majority of lenders.

Since lenders look at your credit score to assess your creditworthiness, having a low credit utilization is key. That’s because if you’re using most of your available credit, it suggests to lenders that you could be a greater risk. A high utilization rate could signal to lenders that you may be stretched too thin financially and need to rely too much on credit. You might therefore have a hard time paying back what you borrow.

Your credit score is also dependent on other factors, such as the number of credit cards you have. For example, if you have one credit card with a low limit, having a high credit utilization may affect your score more compared to someone with multiple credit cards, all of which have high credit limits. Same goes for someone with a lengthy credit history that’s been mostly excellent, compared to someone who has no or a limited credit history.

In other words, credit utilization is an important factor in determining your credit score, but there are other aspects as well, such as your payment history.

Tips for Managing Your Credit Utilization and Credit Score

By managing your credit utilization, you can positively impact or maintain a better credit score. The following are a few effective tactics to do so.

Keeping Your Credit Utilization Rate Under 10%

Though keeping your credit utilization under 30% can help to positively impact or maintain your credit score, the lower it is, the better.

While you may be tempted to keep it at zero, that may not be as helpful as you think. A 0% credit utilization could signal that you’re not using your credit regularly. Since lenders want to see how you currently manage accounts, it will be hard to approve you for a loan if they see you’re not using any.

Instead, consider charging smaller amounts on your credit card and trying to keep your utilization rate to under 10%, which is a benchmark for achieving a high score. That way, you should be able to afford to pay the balance and show creditors you’re using credit regularly.

In addition to keeping your overall utilization below 10%, you’ll want to make sure that your utilization on each of your credit cards is also below that percentage. In many cases, credit utilization may refer to your per-card utilization.

Your best bet would be to look at your current limit for your cards and then aim to keep each credit card balance to no more than 10% of that amount. So if you have two credit cards with limits of $3,000 and $5,000 respectively, you wouldn’t want to charge more than $300 to the first card and $500 to the second.

Recommended: What Is a Charge Card?

Asking for a Higher Credit Limit

Getting a higher credit limit can lower your credit utilization even if you maintain the same balance on your cards. It also gives you more wiggle room — if you need to carry a balance on a credit card, you won’t have to worry as much about a big increase in your credit utilization.

When it comes to asking for a credit limit increase, issuers tend to look more favorably to those who have maintained good credit history, whose income went up, and even those who have less debt. If you do make a request, some credit card companies may conduct a hard credit inquiry, which could temporarily (and slightly) lower your credit score.

Making Payments Twice in a Month

By paying your credit card twice a month, your balance will remain lower. It will also increase the chances of your credit card issuer reporting that lower amount to the credit bureaus. You may hear this method referred to as the 15/3 credit card payment method.

This could mean that your calculated credit utilization is lower, which could help build your credit score. Plus, it will help you avoid racking up excessive credit card debt, which can have a negative impact on your score.

Recommended: How to Avoid Interest on a Credit Card

Keeping Your Credit Cards Active

It may be tempting to close a credit card that you don’t use anymore. However, if you do so — or if you don’t use a credit card for a while and the card is closed automatically — your credit utilization will automatically go up. This is true even if your balance is still the same, as your overall credit limit is now lower. In addition, your credit history could be shortened, which may lower your credit score.

Instead, consider keeping that card open, even if you make a small purchase on it every few months.

The Takeaway

Credit cards are useful tools, helping you make purchases, earn rewards, and possibly build your credit. In order to reap these benefits, make sure to use your credit cards responsibly — including by keeping your credit utilization low. Given how significantly credit utilization affects credit score, it may be worth exploring ways to manage your current utilization in order to lower it.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is a good credit utilization ratio?

A good credit utilization ratio is 30% or lower. Ideally, you should aim to maintain a credit utilization ratio of around 10% to show lenders you’re responsible with credit.

How long does credit utilization affect credit score?

Your credit utilization is a key contributing factor to your credit score. However, a high utilization rate won’t affect your credit score forever. As long as you take the steps to lower it, you can see positive effects within a short amount of time; say, a couple of update cycles after you bring it down.

How much will lowering my credit utilization affect my credit score?

Lowering your credit utilization can have a significant impact on your credit score. That’s because credit utilization makes up around 30% of your credit score calculation with most scoring models.

Photo credit: iStock/Ridofranz

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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In general, there’s no “right” number of credit cards to have. Some might suggest having at least two credit cards, preferably from different networks — say, a Visa and an American Express, or a Mastercard and a Discover card — and strategically choosing them for the best combination of rewards. Others will recommend making this determination based on how many credit cards you can effectively handle, or how many is optimal for your credit score.

At the end of the day, the ideal number of credit cards depends on your personal financial situation. Learn more about how many credit cards you should have, and whether it will be good for you to have multiple credit cards.

How Many Credit Cards Does the Average Person Have?

Cardholders in the U.S. have an average of 3.9 credit card accounts, according to a review of national credit card data by the credit bureau Experian®.

The data also found that the number of credit cards someone has tends to increase the older they get. For instance, Baby Boomers (ages 59-77 currently) and Gen Xers (currently ages 43-58) held an average of 4.3 credit cards, whereas Millennials (ages 27-42 currently) had just 3.5 credit cards on average.

How Many Credit Cards Are Too Many?

There isn’t a set number of credit cards that tips you over into the territory of having “too many.” As long as you can stay on top of all of your accounts and manage them responsibly, having a number of credit cards won’t negatively affect your credit.

That being said, even just two credit cards could be too many if it becomes challenging for you to remember to make on-time payments on both accounts or you’re overspending. The more credit cards you have, the more credit card terms you’ll have to keep track of, which can get complicated. You may also run into paying multiple annual fees, and costs can add up quickly there — especially if you’re not using a credit card enough to justify the cost.

Even if you do think you can manage having multiple credit cards, you’ll want to watch out for applying for too many new cards within a short window of time. Doing so can lower your credit score temporarily, and that in turn could raise a red flag for lenders. Issuers have even begun to introduce rules to prevent cardholders from attempting credit card churning, which is when you repeatedly open and close credit cards to earn welcome bonuses.

Does Having Too Many Credit Cards Affect Your Credit Score?

Having multiple credit cards can either help build or hurt your credit score, depending on how responsibly you use your cards and how well you understand how credit cards work. However, if you’re in a situation where you’re starting to feel like you have too many credit cards, this could lead to negative effects on your credit score.

Multiple credit cards mean multiple due dates to juggle, which can make it easier to miss payments or make them late. Because payment history accounts for 35% of your FICO® score, this can have big implications for your credit.

Secondly, opening a number of new accounts can lower the average age of your credit, which matters since credit history length accounts for 15% of your score. Applying for a credit card also requires a hard inquiry, which can temporarily ding your score.

On the flipside, having multiple credit cards does offer you more access to credit. If you don’t increase your current outstanding balances, this could positively impact your credit utilization rate, which compares your outstanding balances to your total credit limit. Further, a new credit card could benefit your credit mix, which comprises 10% of your FICO score.

Recommended: When Are Credit Card Payments Due?

Potential Reasons to Apply for Another Credit Card

Trying to figure out what is a good amount of credit cards to have? Here are some potential reasons you might consider applying for an additional card.

Potentially Raise Your Credit Score

Getting an additional card can help build your credit. This might be the case if your newly opened card increases your overall credit limit. If you keep your total credit card balances the same, your higher limit will lower your credit utilization rate, which is one of the factors that affect your credit score.

Other ways that getting another credit card can have a positive impact on your credit is if the new card adds to your existing credit mix and if you consistently make on-time payments.

Maximize Rewards

Perhaps the top reason that people open multiple credit cards is to maximize the rewards they can earn. For instance, another card might be worth adding to your arsenal if it optimizes rewards in a category in which you don’t currently earn much. Or, for example, you might pair a basic cash-back rewards credit card for your everyday spending with a travel rewards card that can help you cover the cost of flights and enjoy perks while traveling.

Ensure You Can Pay If One Card Is Lost or Stolen

Having more than one credit card in your wallet can also act as an insurance policy of sorts. Say one of your cards gets stolen or is unexpectedly frozen due to fraudulent activity. That can leave you in a lurch at checkout if you don’t have any cash on you. By applying for an additional credit card, you’ll ensure that you always have a backup in case anything were to happen.

Pay Off a High-Interest Card with a Balance Transfer

You also might opt for an additional credit card if you have debt to pay off and qualify for a 0% APR introductory offer. These promotional offers allow you to move over a balance and pay it off interest-free within a certain period of time.

Just keep in mind that you’ll usually need solid credit to qualify for these offers, and a balance transfer fee will apply. Other pros and cons of no-interest credit cards include the fact that you’ll likely want to ensure you can pay off your debt before the promo offer ends — and a higher interest rate kicks in.

Secure a Higher Overall Credit Limit

Another possible benefit of opening an additional credit card account is that doing so can increase your available credit limit. Even if this card’s credit limit isn’t that different from those of your other cards, adding another card can help you keep your credit utilization rate from getting too high, as your overall credit limit will go up.

Recommended: What Is the Average Credit Card Limit?

Potential Drawbacks of Getting Another Credit Card

As mentioned, opening multiple credit cards within a short period of time can lower your credit score. But even if you don’t do that, there are possible issues that can arise when you have multiple cards — in other words, it isn’t always better to have more credit cards.

Potential to Lower Credit Score

Perhaps the biggest potential issue of having multiple credit cards is the possibility of harming your credit score. If you’re missing payments because you’re finding it hard to juggle multiple due dates, or are overspending and driving up your credit utilization ratio, your credit score will likely suffer.

Plus, even if you’ve paid off your accounts, having a large number of credit cards open can make you look risky to lenders, possibly lowering your score.

Fees

Another possible downside to having a number of credit cards is the fees you could face. Depending on the credit cards you have, you could end up paying multiple annual fees. These could become harder to manage. You might have a harder time keeping track of which cards charge which fees. This can make it more challenging to dodge unnecessary fees.

Harder To Keep Track Of

It’s likely that all of your credit cards could start off with a different due date, which can make it that much easier for a payment to slip through the cracks. Plus, you’ll have multiple different websites or mobile apps to check in on and visit in order to make your payment.

To make it easier on yourself, consider automating your payments or changing your due dates so they all fall on the same day. This can make it easier to adhere to one of the cardinal credit card rules of always making on-time payments.

Could Get Into a Cycle of Debt

When you have an array of credit cards in your wallet to choose from, it can feel easy to keep swiping. Plus, by using a number of different cards, you’ll be spreading your charges out, which can make it more challenging to track how much you’re actually spending in total.

To keep your spending in check, don’t spend more on your credit cards than you can actually afford to pay off in cash. Ideally, you’ll be able to pay off all of your credit card balances in full each month. Otherwise, interest charges can add up quickly, which is one of the reasons why credit card debt is hard to pay off.

More Difficult to Spot Fraudulent Activity

When you have just one credit card, checking your credit card balance regularly is pretty easy to do. But once you start growing your number of cards, it will take more legwork and effort to stay on top of your statements and check for any suspicious charges. This can make it harder to spot any potentially fraudulent activity and report it in a timely manner.

Determining How Many Credit Cards to Have

Now that you know the potential upsides and drawbacks to having multiple credit cards, you’re left with the question: How many credit accounts should I have? As mentioned before, the ideal number of credit cards varies from person to person. Here’s what to consider as you make this determination for yourself:

•   Do you have a history of responsible spending? If you think that applying for another credit card will lead to spending beyond your means, you might be better off skipping an additional card.

•   What’s your reason for getting another card? Opening up another card can help you maximize rewards, increase your purchasing power, or even assist in building credit. However, if you’re seeking another card because you’re low on funds and want to be able to fund more purchases, that could lead to a cycle of debt.

•   Are you confident you’ll be able to pay off your balances in full each month? Credit card interest can add up quickly if you’re not paying off your balances in full on a monthly basis (just check out our credit card interest calculator for proof). Before taking on an additional credit card, ensure you’re in a good financial position to pay off your balances regularly and in full.

•   Have you built your credit score since you last applied? A better credit score generally translates to better rates and rewards and higher credit limits. To make applying for a new card worth your while, it generally helps if you’ve done work to positively impact your credit since you last applied.

•   Do you have any other upcoming loan applications? If you know you’ll need to apply for a loan — whether that’s a car loan, a personal loan, or a mortgage — consider whether a credit card application is necessary right now. Applying triggers in a hard inquiry, which temporarily dings your score, making you a potentially less competitive applicant for the loan you need.

Recommended: Tips for Using a Credit Card Responsibly

The Takeaway

How many credit cards you should have largely depends on your personal financial situation and how many credit cards you feel you can responsibly manage. In the big scheme of things, how you use your credit cards may be more important than how many you have. To determine the ideal number of credit cards for you, you’ll want to weigh the pros and cons of adding another card to your wallet.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Is 5 credit cards too many?

The answer is: It depends. Five credit cards is not too many if you are managing your debt responsibly, paying on time, and not being overwhelmed by interest charges. If, however, you are having trouble handling the debt and the various balances and due dates, those could be signs that five cards are too many for you.

How many cards should I have for good credit?

There is no specific number of cards you need to have for good credit. What can be most important is to manage your cards wisely and not have your debt go too high nor your credit score too low while using them. Some financial experts recommended having several cards ideally so that your credit file isn’t too thin. 

Does canceling a credit card help or harm your credit?

Canceling a credit card could harm your credit score. It could reduce the length of your credit history, which is a negative, as well as lower your overall credit limit and therefore potentially decrease your score. If you have a card you don’t use often, you might keep it open and use it occasionally, once every few months, to avoid these potential issues.

Photo credit: iStock/Drs Producoes

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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Pulling a metal credit card out of your wallet was once considered a status symbol. Today, however, more card issuers have added credit card metal options to their card offerings for customers who prefer a sleek — and heavier — alternative to plastic.

But beyond being metal instead of plastic, you may wonder what is a metal credit card exactly and are they better? Here, learn the similarities and differences between plastic and metal credit cards, as well as how to get a metal credit card if you’re looking to add some heft to your wallet.

What Is a Metal Credit Card?

A metal credit card functions much in the same way as its plastic cousin. You can swipe a metal card at a point-of-sale terminal, or if the card is chip- or RFID-enabled, you can insert or tap it for payment.

Additionally, cardholders who have a metal credit card but prefer to use their digital wallets, can use their digital metal card the same way as other credit cards in their digital wallet. To use a credit card in this manner, simply tap your device toward the card reader to activate the transaction.

A key distinction with metal credit cards, however, is the material that the physical card is made of. They’re typically composed of some type of hard, durable metal.

Recommended: When Are Credit Card Payments Due?

A Brief History of Metal Credit Cards

The credit card issuer to spark buzz with its metal credit card was American Express. In 1999, it launched the Centurion Card — colloquially called the Black Card — which was the first metal card of the time.

The innovative, invite-only card was offered to the highest spenders of AmEx’s Platinum Card. Its exclusivity, coveted benefits, and unique credit card metal material set an impressive bar for the luxury credit card market moving forward.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

What Are Metal Credit Cards Made Of?

The transition from traditional, lightweight plastic to various metals is why some credit cards are heavy. Specific materials that are used for metal credit cards vary across card issuers, with many companies keeping information about their credit card metal materials under lock and key.

As an example, the metal used for the Apple Card is titanium, while some cards use stainless steel, metal alloys, 24 karat gold, palladium and other metals, as well as hybrid cards that have a metal exterior with a plastic core.

Why Metal Credit Cards Are Popular

Since AmEx launched its metal Centurion Card, metal cards have oozed a sense of luxury and prestige. This premium metal card phenomenon went mainstream when Chase announced its metal Sapphire Reserve credit card in 2016.

The heavier material of metal credit cards has a noticeable in-hand feel that some cardholders prefer. Metal credit cards are also generally associated with elite status. For some, the perk of carrying a card that feels and looks special can be attractive.

Differences Between Metal and Plastic Credit Cards

Although metal credit cards have grown in popularity in the market, traditional credit cards made out of plastic are still commonly available. Below are the main differences to know between a metal versus plastic card:

Similarities Between Metal and Plastic Credit Cards

As mentioned earlier, how a credit card works doesn’t vary whether it’s metal or plastic. You can add both metal and plastic cards into a digital wallet for convenience and use them in the same way to make purchases.

Further, both options offer the same bank-level security features you’ve come to expect from a credit card since encryption isn’t dependent on the material of the card. Rather, it’s contained within other features of the card, like the magnetic strip or chip-and-PIN technology.

Finally, despite the noticeable added weight of a metal credit card, their dimensions are roughly the same as those of a plastic credit card. Both a metal and plastic credit card fit into a standard wallet’s card slot, although metal cards might be slightly thicker.

How to Get a Metal Credit Card

Various card companies offer credit card products that issue a metal card, if you qualify. A good credit card rule of thumb to find the right card — whether metal or otherwise — is to compare various features, such as annual fees, rewards programs, sign-up bonus incentives and minimum required spend, and other card benefits.

Here are some examples of where to get a metal credit card and its specific card product name(s):

•   Amazon: Amazon Prime Visa Card

•   American Express: Gold Card, Platinum Card, Centurion Card

•   Apple: Apple Card

•   Capital One: Savor, Venture X

•   Chase: Sapphire Preferred, Sapphire Reserve

•   Citi: Citi / AAdvantage Executive World Elite MasterCard

•   HSBC: Elite Credit Card

•   JP Morgan: Reserve Credit Card

•   MasterCard: Gold Card, Titanium Card, Black Card

•   U.S. Bank: Altitude Reserve Visa Infinite Card

You may also find other credit cards, such as travel rewards cards, that offer metal versions.

Factors to Consider Before Getting a Metal Credit Card

Flashing a metal credit card might feel like an ego boost, but the bells and whistles of a premium metal card will also cost you. And, at the end of the day, a credit card’s material doesn’t affect what a credit card is and how it serves you.

Generally, credit card companies offer a metal credit card for its premium card products that charge steep annual fees. For example, for the privilege of using a swanky metal card, you might have to pay an annual fee of $95, with some cards charging up to a $550 annual fee or even higher.

If that’s within your budget, take a closer look at the benefits and incentives that the metal card offers, compared to non-metal cards. Whichever card you get next should serve your needs, whether that’s preference for high bonus reward categories in your top monthly spending categories or unique travel benefits and protections.

Also, consider that getting rid of your metal card takes a bit more effort than a standard plastic card. Whether you close your account or you’re issued a replacement for an expired card, you’ll usually have to mail your old metal card to the issuer for disposal. They’ll issue you a dedicated envelope to do so, but it’s an extra step that doesn’t exist with a plastic card.

Recommended: What is a Charge Card?

Pros and Cons of Metal Credit Cards

As you can see, there are both upsides and downsides to metal credit cards. Here are the pros and cons to take into consideration before you get a metal credit card:

How to Destroy a Metal Credit Card

If your existing metal credit card has passed its credit card expiration date, you won’t be able to destroy it using a standard pair of scissors, nor can you put it in a shredder that could typically handle your plastic cards.

To effectively destroy a metal credit card, you must either:

1.    Return it to your card issuer by mail. Your issuer will provide you with a prepaid mailing envelope.

2.    Drop it off at a local branch. If your issuer has a brick-and-mortar location, it might be able to dispose of it or mail it to the correct department.

Since the card is made of metal, it requires industrial-grade tools to dispose of securely. Additionally, shredding it yourself might result in injury. Consider relinquishing the metal card to your issuer for safe disposal.

The Takeaway

Metal credit cards might add panache to your credit card rotation, but their aesthetic appeal shouldn’t be the only reason to seek one out. A plastic card that has a generous rewards program like SoFi Plus might be more valuable in the long run than a metal credit card that has limited perks. Always consider your own credit card habits, the types of purchases you make, and the benefits that are most valuable to you when shopping for a new credit card.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can anyone get a metal credit card?

Everyday consumers who meet a card issuer’s lending criteria can be eligible for a metal credit card. Unlike decades prior when metal credit cards were accessible to a select few by invitation only, today more card issuers offer their own metal credit card. That said, there are a number that are still invitation-only for high net worth individuals.

Are metal credit cards safe?

Yes, metal credit cards are safe to use. They have the same security features as their plastic credit card counterparts. The main difference is that the credit card metal material is more durable.

Can I request a metal credit card?

No, generally, a metal credit card is not a feature you can choose, although a few issuers may allow you to choose between plastic or metal. Instead, metal credit cards are more often offered for specific credit card products that you can apply for.

Why are some metal credit cards heavy?

Credit card metal materials vary depending on the card. Some card companies use materials like stainless steel, aluminum, titanium, or a blended mix of metals to create the card. Different metals have different weights, some of which may feel heavier.

Are metal credit cards generally better?

No, metal credit cards aren’t better than plastic cards in terms of how the card functions or its features. Metal credit cards do have an edge when it comes to durability, however.

Photo credit: iStock/VioletaStoimenova

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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