There's a simple rule to follow to figure out how many credit cards is too many

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  • How many credit cards you should you have? There's no definitive number, but finding the right amount for you boils down to a single rule.
  • Have as many as you want, as long as you're able to pay off each card in full, either on time or early, every month.
  • Your payment history is one of the most influential factors in your credit score, and falling behind on payments can wreak havoc on your credit, no matter how many cards you have or rewards you're getting.
  • Visit Business Insider's homepage for more stories.

I was terrified when I got my first credit card at 20 years old, and I was reluctant to get a second one a few years later.

It scared me to have the power to spend money I didn't technically have - until I figured out my system. Never spend more on the card than is currently in your bank account, even if there's a paycheck coming, and always pay off the entire balance before it's due. That became my spending mantra.

I have three personal credit cards now (not counting the authorized user card my parents set up to help me start building credit as a teenager). That's a good number for me, for two reasons: I can keep track of my spending easily, and I know I'll be able to pay off the full balance on every card when it's due. And I have a high credit score to show for it.

In the age of credit-card rewards, it's en vogue to build up an arsenal of plastic to maximize every purchase. I give many kudos to those who can manage multiple credit cards, endlessly wringing out rewards. But as Holly Johnson, a writer with 26 credit cards, explained on Business Insider, none of it matters if you're unable to maintain a high credit score and stay completely debt-free.

Read more: The best credit card rewards, bonuses, and benefits of 2019

If you're wondering how many credit cards is the right number for you, have as many as you want, if - and only if -you're able to pay off the entire balance on each card on time. We'll say that again for those skimming: You should be able to pay every credit card balance in full and on time.

Credit scores are based on a handful of factors, two of the most important being payment history and credit utilization. The hard inquiry that appears on your credit report when you apply to open a new line of credit is minimal in comparison to these two factors - and ultimately may even improve your credit - which is how people like Johnson and Business Insider's credit card rewards reporter David Slotnick can have 20-plus cards and great credit.

Payment history makes up a whopping 35% of your FICO score. Falling behind on credit-card payments is a slippery slope that can wreak havoc on your credit score. People with excellent credit have no record of late or missed payments in the last four years, according to a LendingTree analysis.

Credit utilization is how much of your available credit you're using each month. Ideally, this should stay below 10%, meaning you carry less than $1,000 in debt for each $10,000 in available credit you have.

Read more: I have 20 credit cards but I only carry 3 in my wallet. Here's how I choose which ones I can't go without.

If your credit utilization is too high - maybe you only have one or two credit cards and get close to your limit each month - consider opening a new card (and taking advantage of a stellar introductory bonus) or calling your bank and asking if you can apply for a credit limit increase on one of your existing cards. While a request for a credit limit increase will require a hard inquiry on your credit report, it's a relatively small impact outweighed by the improvement in your credit utilization.

All that said, we all fall on hard times financially. If you find yourself in debt at any point or simply with too many credit cards to manage, reduce your regular usage to just one or two cards. You may not need to cancel every card, as your credit score could suffer, but don't feel like you have to give every card air time. The most important thing is avoiding debt as best you can.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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