In short
Two-part episode. First, Giving Tuesday guidance: plan intentional charitable giving, research nonprofits using IRS filings/audits and avoid relying on admin-overhead ratios; consider giving together (giving circles/mutual aid) and start even if overwhelmed. Second, credit cards: how multiple cards affect credit scores and how to manage them without damage.
Guests
Grace Nicolette, VP Programming and External Relations at the Center for Effective Philanthropy; co-host of the Giving Done Right podcast. Erin Hurd, NerdWallet credit card “whiz” and travel writer.
Key claims
Multiple cards don’t inherently hurt credit; what matters is on-time payments and utilization. Applying can cause a temporary dip. Closing cards can reduce available credit and average age; don’t close before 1 year. Business cards often don’t show on personal credit reports.
Notable examples
Guinness record holder in India with 1,638 valid credit cards (2021). Mackenzie Scott giving billions, including to HBCUs. Food banks and mutual aid amid funding cuts.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOUnderstanding Giving Tuesday
0:04 to 1:13
Explore the significance of Giving Tuesday and its global impact.
“What happens when your internet drops during business hours and you're the one running the business?”
Understanding Giving Tuesday
1:26 to 1:44
Explore the significance of Giving Tuesday and its global impact.
“You think you know a browser, But Gemini and Chrome?”
Understanding Giving Tuesday
2:29 to 3:34
Explore the significance of Giving Tuesday and its global impact.
“To explore the topic of giving, we have Grace Nicolette on as a guest.”
Intentional Charitable Giving
3:35 to 4:28
Learn about the importance of planning and being intentional in charitable giving.
“Giving Tuesday comes right after Cyber Monday, which is like the cousin of Black Friday.”
Trends in Giving
4:29 to 6:50
Discuss trends in charitable giving and the impact of donor collaboration.
“So how far ahead should people be thinking about charitable giving?”
Deciding Where to Give
6:51 to 8:11
Guidance on selecting trustworthy nonprofits and understanding their needs.
“So for people who are not sure where to give to but want to give, how can they think about their decision-making process in giving or where to give their money?”
Tax Benefits of Charitable Giving
8:12 to 11:03
Explore the tax implications and benefits associated with charitable donations.
“So what are some red flags that people should look out for when they're doing that research?”
Role of Grassroots Initiatives
11:04 to 14:02
Discuss the importance of grassroots fundraising in current socioeconomic challenges.
“I think that donors often say, oh, I want to find a nonprofit that is, you know, going to be self-sustaining.”
Navigating Overwhelm in Giving
14:02 to 18:04
Learn how to start giving back without feeling overwhelmed.
“So what advice would you give people who maybe feel a little overwhelmed?”
Transition to Money Questions
18:04 to 18:41
Hosts introduce the upcoming segment on money questions.
“But before we get into that, think about where you need some guidance with your money.”
Show all 23 chapters
Transition to Money Questions
18:47 to 19:52
Hosts introduce the upcoming segment on money questions.
“Summer always makes me rethink what I'm reaching for every day.”
Transition to Money Questions
20:12 to 21:24
Hosts introduce the upcoming segment on money questions.
“Finding a therapist is hard enough, but finding one who actually takes your insurance?”
Understanding Credit Card Impact
21:37 to 22:59
Explore how multiple credit cards affect your credit score.
“This episode's question comes from Aileen, who sent us an email.”
Managing Multiple Credit Cards
22:59 to 28:00
Learn strategies for managing multiple credit cards effectively.
“Well, I don't because I am a nerd and it is my hobby turned into my job.”
Impact of Closing Credit Cards
28:00 to 28:50
Learn how closing a credit card affects your credit profile.
“one-year mark because that's just the mark of a bad relationship with a credit card issuer.”
Strategies for Managing Credit Cards
28:50 to 29:50
Discover strategies to manage your credit cards effectively.
“If you've tried a card for at least a year and you're pretty sure it's no longer a good fit, maybe the annual fee is too high or it just doesn't fit your spending patterns anymore.”
Evaluating Credit Card Benefits
29:50 to 30:50
Understand the benefits of credit cards beyond earning rates.
“it or maybe even cancel it, what should they be looking at?”
Staying Organized with Multiple Cards
30:50 to 31:50
Learn how to manage multiple credit cards without overwhelm.
“beyond your credit score when you're thinking about how to manage your credit cards.”
Tracking Rewards and Benefits
31:50 to 32:58
Explore tools to help track your credit cards and their rewards.
“And so if you are opening a new card with an issuer that you already have, you're not juggling a new site, a new login, a new app.”
Becoming Fearless with Credit Cards
32:58 to 35:39
Gain confidence in managing multiple credit cards effectively.
“can help you see and track all of your credit cards accounts in one place.”
Keys to Successful Credit Card Management
35:39 to 36:59
Identify important tips for managing multiple credit cards responsibly.
“Anything else you think those hoping to break into the credit card optimizing game should be aware of when it comes to their credit and just day-to-day management of credit cards?”
Keys to Successful Credit Card Management
37:43 to 38:44
Identify important tips for managing multiple credit cards responsibly.
“This episode is produced by Tess Vigland.”
Keys to Successful Credit Card Management
38:48 to 39:22
Identify important tips for managing multiple credit cards responsibly.
“The right window treatments change everything.”
Transcript
Automatic transcript. May contain errors.0:00Elizabeth Ayoola:Today's episode is sponsored by Spectrum Business. What happens when your internet drops during business hours and you're the one running the business? Say goodbye to your to-do list, unless that list involved panicking and having trouble getting any actual work done.
0:15Sean Pyles:For business owners, being connected isn't a perk. It's how you take payments, talk to clients, and keep things moving. Not to mention pretty much everything else. Spectrum Business keeps businesses connected seamlessly with fast, reliable internet and advanced Wi-Fi. plus phone, TV, and mobile services if you need them.
0:33Elizabeth Ayoola:And Spectrum Business offers 100 % U.S.-based customer support 24-7 to help you stay up and running. That means you get actual help, not submit a ticket and hope for the best.
0:44Sean Pyles:Our colleague Carrie on the social media team is a Spectrum customer, and she told us that she chose Spectrum because people online kept recommending it as a reliable and affordable option for internet and phone service.
0:54Elizabeth Ayoola:She told us she was actually a little hesitant to switch at first, since she'd been using a different service for a while. But after a year with Spectrum, she's actually had a really good experience. Her phone gets strong, reliable service, and it automatically connects to Spectrum Wi-Fi everywhere.
1:10Sean Pyles:Join the millions who rely on Spectrum Business. Visit spectrum.com slash business to learn more. One more time, that's spectrum.com slash business.
1:19Elizabeth Ayoola:Restrictions apply. Service is not available in all areas. This episode is brought to you by Google Chrome. You think you know a browser, But Gemini and Chrome? That's new. It can help you with practically anything on the web. Like restoring a vintage motorcycle from a 50-page restoration block. Or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18+. Did you know that a man in India made the Guinness World Record for the largest collection of valid credit cards in 2021?
1:57Elizabeth Ayoola:Yep, he had a whopping 1 ,638 credit cards. He probably didn't have to worry about a credit score, but today we're going to look at how having multiple credit cards could impact yours.
2:14Elizabeth Ayoola:Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Elizabeth Ayola. In a bit, we'll discuss how having multiple credit cards can affect your credit score. But first of all, it's almost time for Giving Tuesday. To explore the topic of giving, we have Grace Nicolette on as a guest. She is the Vice President of Programming and External Relations at the Center for Effective Philanthropy and a co-host of the Giving Done Right podcast. Hello, Grace. Hello. It's great to be with you. So first of all, can we talk about what Giving Tuesday is for those who have never heard about it before?
2:54Giving Tuesday is a global movement that started, boy, maybe 20, 25 years ago now. And it's this idea that during the season of the year where we're thinking about what we're thankful for and being with family members, that it's actually a really great opportunity to band together and to give. and it might be a great way that people can be teed up to think about giving if otherwise they might not think about it that much. So they can kind of wait until this date if they needed to. And so it's since really grown and exploded and it's now a global movement where, you know, across many countries, nonprofits and donors are excited about it.
3:34Elizabeth Ayoola:It's so interesting that you talk about how after we've done all that spending, right, Giving Tuesday comes right after Cyber Monday, which is like the cousin of Black Friday. And I find it interesting because there's this big push for spending mostly throughout the holidays, and then you have this one day for giving. But after people have spent all this money, where do you budget in charitable giving or spending? If it were up to me, I wouldn't have put those two dates together. You know, one of the things that we talk about at the Center for Effective Philanthropy where I work is that it's really important to actually be very intentional about our giving.
4:07So I know that sometimes we can end up buying things that we don't mean to buy. and then it is actually really hard to have money left over for giving to others who might be in need. And so we always recommend being really intentional. What are your values? What would you like to give this year? And really setting goals and meeting those goals.
4:27Elizabeth Ayoola:And when you say being intentional, what I take from that is maybe planning ahead. So how far ahead should people be thinking about charitable giving? Because usually there's a lot of talk around it around the end of the year. I think that there is room for what people call expressive giving. So you are asked or you're moved. And so you may not have planned to give something, but then you did. I think that's absolutely great and very needed and really much a part of the giving traditions that a lot of us come from. I think, though, that given the needs of the world, especially those with means, and that would include many people in the Western world, that we should think about what can we give to those around us who may not have as much or even those across oceans who may be struggling.
5:15And so I do think that thinking ahead, thinking what proportion of my income or even wealth should I be giving and when. So certainly by default in the United States, a lot of people wait until the end of the year. Historically, that's been for tax reasons. There really is no reason why it has to be done this time of year. If you talk to any nonprofit leaders, they would rather that you do it and spread it out throughout the year. I think that even just having these conversations, maybe with your family, maybe with the financial planner, or even just people who are working in causes that you care about can really start spurring some of that thinking.
5:49Elizabeth Ayoola:And you mentioned a little bit earlier that for Giving Tuesday specifically, you know, the idea of giving on that day or around that time has blown up over the years. What trends have you seen, if any, in terms of maybe how people are giving? It's an exciting time to be in the giving space. I think that donors who are now starting to open up their eyes to how I can give more smartly or how I can give with other people, whether it's people in my family or people in my community, it's actually a really exciting time to be diving in. There's a lot of interesting innovations. You've had people like Mackenzie Scott, who's the ex-wife of Jeff Bezos, who's literally given billions of dollars to all different kinds of causes, including most recently a lot of HBCUs.
6:31and there's a way that she does it that I think has really spurred a lot of really interesting conversation. I think we're also seeing a lot more giving together, so giving circles. So sometimes it can just feel really lonely to give. You want to make sure that you're giving in a way that is having an impact and there's actually like a learning journey to be had along the way and so doing it with others can be like a really transformative experience.
6:54Elizabeth Ayoola:I love that you mentioned Mackenzie giving these large amounts to the HBCUs and it makes me think about people who sometimes don't want to give because they say, well, you know, there's these large organizations and they're getting all the money and how much is actually trickling down to the people who need it, right? So for people who are not sure where to give to but want to give, how can they think about their decision-making process in giving or where to give their money? I would say it takes all types, right? Like the big organizations are big because they have the ability to attract donors.
7:24Now, if you talk to people who work there, they'll probably dispel the myth that they don't need the funding, I would just say, starting with getting curious, like what are causes that you care about? Do you know anyone who works with those causes? And then doing some online research. What's great about in the United States is that, you know, there's tax filings for all these nonprofits. You can actually go on and look, read their inner reports and kind of learn about them. You don't have to give to an organization that you don't trust or you feel like may not need your funding, but do find one that really aligns with your values.
7:54And if you're planning to give a big gift, reach out to them, have a conversation, ask your questions. They would welcome that. Pay them a visit. Nonprofit leaders really love to show you the impact that they're making. And it really is starting a journey that will get you deeper and deeper in understanding some of the issues that you care about. So what are some red flags that people should look out for when they're doing that research? If you don't have any connection to a nonprofit, I think it is worth maybe reaching out, having a conversation, you know, doing some online searches just to see, have they been in the news?
8:27What are they working on? And what might some of the biggest needs be in terms of red flags is if the IRS has tagged them as not having like a completed or a clean audit, that would be a major red flag. Or if their leadership or the organization itself has been involved with any kind of legal action. But that is such a tiny proportion of nonprofits. And sometimes I feel like we can have this outsized view that nonprofits are somehow very dangerous to give to or somehow bloated and there's real risk in giving to them because it might be wasted or even corrupted. And that just simply isn't borne out by the facts.
9:05One myth that I love to bust since you asked about kind of flags is for a donor, I would say it's really important not to think about whether you should give to a nonprofit based on like something like an administrative overhead ratio. I hear this a lot. It's like, well, I don't want to give this nonprofit because, you know, 35 % of their money goes to admin overhead versus this one where it's 15%. And I feel like what that shows is actually a fundamental misunderstanding of how nonprofits operate. So when you are working on an issue, depending on the issue and depending on the type of organization, that overhead can be really important, especially like if you are, let's say your organization is all about the people, right?
9:45Like let's say you're a tutoring organization or something like that. Attracting and keeping talent in nonprofits is really important. You want your best and brightest working on some of the most intractable problems. And you simply cannot tell anything by an administrative ratio like that. So I wish there was that one thing that could just check the box and tell you, but it does take more research than that. And I wouldn't rely on any one single measure.
10:09Elizabeth Ayoola:I know one of the tax benefits of charitable giving is that you can potentially lower your taxes. What are some of the tax benefits of charitable giving? And actually, it's been changing a lot. I think in the big, beautiful bill, we see a lot of changes that are coming our way. My understanding is that the changes actually make it easier for smaller donors to itemize their giving. So we're hoping that that actually encourages more donors to give. And I think it's important to point out that in other countries, many other countries, there is no tax deduction for giving. It is, in some ways, a unique feature of the U.S.
10:47tax system. And there really is this sort of understanding that by charitable giving, you're actually partnering with the government in some ways or partnering with the social compact that we all have that we're kind of doing our part to give back to society. So I think it's a great thing. Nonprofit leaders will be the first to tell you they need large, generous donors, right, to sustain them. I think that donors often say, oh, I want to find a nonprofit that is, you know, going to be self-sustaining. There is no such thing. Nonprofits are self-sustaining when donors actually choose to sustain them.
11:20We shouldn't expect every nonprofit to bust out a business model. Some of these nonprofits are specifically working on issues caused by market failure. And so a business model isn't necessarily going to be the answer for every organization. So that sustainability question really can be answered by faithful and generous donors. For those who are curious about potentially how much you could deduct through charitable giving,
11:47Elizabeth Ayoola:And generally, you can deduct up to 60 % of your adjusted gross income via charitable donations, but you might be limited to 20%, 30%, or 50%, depending on the type of contribution and the organization. But NerdWallet has information on that, as well as the IRS, in case you wanted to know. So this year, we experienced a myriad of challenges that have impacted the economy and our pockets. Many people, unfortunately, suffered through the government shutdown. And I personally have noticed several grassroots initiatives and community fundraising to help people in financial binds. What role does that type of giving play in our current socioeconomic landscape?
12:26Oh, it's so vital. You know, we saw this starting in COVID that I think there was a greater recognition that people who are in communities that are historically overlooked or marginalized, they experience the first brunt of really big macro trends that happen. So like the COVID pandemic with job losses and not being able to show up in person, we're actually seeing that play out again this year with government funding cuts, widespread job loss from loss of federal jobs, and also just the economy not being as strong as one would hope. And so I think that those kinds of mutual aid organizations and functions are really, really vital right now.
13:06And sometimes they are more formalized in the form of a nonprofit, but they can also be part of religious institutions. They could also be just neighbor to neighbor. I would say if you haven't really gotten involved in that way, this is actually the perfect time to do it. Donors are often really worried about whether or not they can make an impact. They really want to know that their involvement or their dollars are really going to go the distance. I'm telling you right now, they will go the distance. People are really hungry. Food insecurity is at an all-time high. We just did a study. 30 % of nonprofits have lost government funding.
13:40People are getting let go left and right from the sector. And there really is a way to help people with some of their most basic needs, putting food on the table, medical bills. I mean, you name it. There are so many groups in civil society that focus on these issues. So get started. If you haven't already, ask questions. This is really a moment to not sit back.
14:02Elizabeth Ayoola:And Grace, I will say sometimes if you're anything like me and you get overwhelmed by all of the problems in the world and you want to help everyone, sometimes you end up helping no one because there are too many choices and you don't know where to start or you feel like it's not enough. So what advice would you give people who maybe feel a little overwhelmed? I can really relate to that. I mean, it is very, very real. We can't save everyone. I mean, and none of us are Mackenzie Scott where what we would give would really kind of move the needle in a big way. But we still can play our part and it is important that we do.
14:33And so I think that just start somewhere. I was actually speaking with someone recently who said, I try to say yes when I'm asked to do something. And I thought that was really great. It's like, what a great kind of posture to live with. You can't solve everything, but you can start somewhere. And who knows where that somewhere will lead you. And so I would say whether that's calling up the one person that you know who works and a cause that you really care about, or going online and doing some research about nonprofits in your area, contacting your local community foundation, which is usually a great resource for understanding the needs in your community.
15:08Just get a start, you know, one step after another, one foot ahead of the other. Let's not be paralyzed by the scope of the problem, but we have a role to play.
15:17Elizabeth Ayoola:I give to several different organizations, and usually I choose when I'm pulled to something. Honestly, a lot of them came through Netflix documentaries. Oh, nice. So, you know, they might have a foundation and then I'll end up just giving a recurring donation. But all that to say, everything that I donate to aligns with my personal values and the things that I would like to see in the world. So how can people give in accordance with their values? Your example speaks to me that the story and the understanding that you gained by watching those documentaries has really kind of changed your perspective on it.
15:49And now you're involved, right? And so I would say for most folks, that's a great place to start if you don't know where to start reading the news. Like, what are some of the things that when you read it, you're like, man, somebody should really work on that. Kind of listening to yourself and asking those questions. We often don't make time to do that. We might be thoughtful about doing research on things that we buy or things that we want to do, like vacations and all that. But, you know, it really does take a level of intentionality and even strategic thinking when it comes to where we should give.
16:20And we can make such a big difference if we do that. And so, yeah, just getting started anywhere is great. My last question for you, Grace, is what are some ways that you personally like to give?
16:33Elizabeth Ayoola:And will you be giving specifically on Giving Tuesday? It's funny. I have grown so much now that I'm working in philanthropy. It's interesting. I am still changing in the ways that I give every year. It hasn't been this static thing. I'll be honest that the Mackenzie Scott example, as we've studied it in our organization, has made me understand more deeply how impactful it is to nonprofits when donors don't spread their giving around, but actually give really deeply to just a fewer number of nonprofits. And so I've been trying to do that a little bit more. Certainly food banks are a big part of what I'm thinking about right now.
17:12The number of people that they're serving is like at record-breaking levels. We're talking about people who are the working poor. Most people are working. They just cannot afford to keep the food on the table because of either disability or their jobs are just not paying as much. So that's very front of mind for me. Yeah, and I would also just say if there are opportunities to give with your friends or with your family, that can just be really special. Over the years, I've had a couple opportunities to talk to my elderly parents about giving together. And it's been something that we've really enjoyed doing.
17:44Like they've actually introduced me to a couple nonprofits and vice versa. And so there's been a richness to that interaction. And I also have kids now, so I'm trying to involve them in thinking about how they can give back. So doing it with other people can be really special.
17:59Elizabeth Ayoola:Thank you so much, Grace Nicolette, for coming and talking to us about giving. Thanks for having me. Next up, we'll be chatting about whether having multiple credit cards can hurt your credit score. But before we get into that, think about where you need some guidance with your money. Maybe credit cards have hurt your score and you need tips for getting out of debt. Or you're anxious about the upcoming tax season and need strategies for preparing. Whatever your money question, we nerds are here to help you. So leave us a voicemail. You can also text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.
18:36Elizabeth Ayoola:All right, let's get to this episode's money question segment. That's up next. Stay with us. Today's episode is sponsored by Quince.
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20:12Elizabeth Ayoola:Finding a therapist is hard enough, but finding one who actually takes your insurance? That's where most people find online therapy platforms fall short. Many don't work with insurance at all, which means you're stuck paying the full cost out of pocket or paying for an expensive monthly subscription. Rula does things differently. They partner with over 100 insurance plans, making the average copay just$15 per session. That's real therapy from licensed professionals at a price that actually makes sense. Think about it. You use your insurance benefits to maintain your physical health, so why wouldn't you do the same for your mental health?
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21:36Sean Pyles:We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Aileen, who sent us an email. I've listened to several of your podcast regarding all the travel rewards credit cards, including the recent one where a travel writer, I think, took her whole family to Europe in business class. She mentions their household has over 40 credit cards. Can you address how having so many credit cards affects your credit score? Do people open cards, get the points, use the points, close the card, and get a new card with sign-up bonus points? What does this do to your credit score?
22:08Sean Pyles:Thank you, Eileen.
22:10Elizabeth Ayoola:Now to help us answer Eileen's question on this episode of the podcast, we are joined by that travel writer in question, NerdWallet credit card whiz, Erin Hurd. Welcome back to Smart Money, Erin. Thanks so much for having me.
22:23Sean Pyles:Hey, Erin, let's start with a simple question and some fact checking here. How many credit cards do you have? Well, you know, that question really is not so simple. I had to go in and count because I knew you were going to be asking me that so that I could give you an exact number. By the way, I keep most of my credit cards in a baseball binder because they all don't carry with me all the time in my wallet. So I currently have 27 cards in my name and my husband, who I call my player two, my P2, has 24 cards open in the moment. So that's a total of 51 in our household right now. That is impressive and a little intimidating.
22:58Sean Pyles:Do you ever forget that you have certain credit cards open because it seems like a lot to manage? Well, I don't because I am a nerd and it is my hobby turned into my job. So I love my cards like they're my babies, but I would understand that most people would have a hard time.
23:12Elizabeth Ayoola:I have five, and I'm not saying I have a hard time, but sometimes I have a hard time. So how did you get to this point, Erin? Very slowly. The game of credit card rewards, and rewards are the reason why I have so many cards. This is a long game. My husband and I built this portfolio of cards over many, many years. We're not rushing in and opening a ton of cards and then moving on to the next. It's truly a long game. And I also want to point out that most of the, well, not most, many of these cards are small business credit cards. My husband is self-employed, and I have a few side hustles that make me eligible to apply as a sole proprietor.
23:47And actually, many people are eligible for business cards and may not even realize it. But business credit cards can offer really great rewards, and they don't show up on your personal credit report. And that means they largely do not affect your credit score.
23:59Sean Pyles:I imagine that at a certain point, you might get diminishing returns of having so many cards because you, I assume, have applied for and maybe been approved for many, many cards on the market. Do you find that you have fewer options nowadays? So each of the issuers has their own guardrails against people just wanting to earn a lot of rewards. And so sometimes we'll see what we call family rules that forbid you from getting this card if you've ever had it before or if you've had it within a certain amount of time. And still, there's still plenty of opportunity out there. So as it relates to our listener's question, having a specific number of cards, whether it's 4 or 40 or 51, won't necessarily impact your credit score one specific way or another.
24:38Sean Pyles:What's more important is how you manage your credit, like making on-time payments, not using too much of your available credit, that sort of thing. Your credit score may temporarily dip after you apply for a credit card due to the credit card company checking your credit, but that's not likely to cause too much damage or last that long. Erin, can you talk with us about how your credit has been impacted positively or negatively as you've acquired and managed all these various credit cards over the years? So one of the first assumptions that many people make when they hear about my credit card collection is that I must have a terrible credit score.
25:08But actually, that is far from the truth. My credit score right now is well above 800, and that's considered an excellent score. So one of the biggest factors that determines your credit scores is your credit utilization or how much credit you're using compared to how much available you have to you. So therefore, the more credit cards you have, the more available credit you have. And that means that opening new cards can actually help improve your credit utilization, which can in turn help your score. Now, of course, that assumes that you aren't maxing out all these cards. You're not spending up to your limits.
25:41That would not help your credit utilization ratio at all. And this also assumes that, like I do, that you make on-time payments and you use your credit responsibly. And in order for this to make sense for me and for anyone doing this, I pay all my bills in full each month. And that's because the interest that you would pay in carrying a balance on a credit card would far outweigh the rewards that you earn.
26:04Sean Pyles:Quick follow-up question. Do you know how much total available credit you have across all of your cards? Just yours, not your husband. Not offhand. A lot more than I would ever spend. Yeah, I would imagine it's well north of$100 ,000. Yes. Because I'm close to that with my five to six credit cards that I have. Yeah, I'd say probably 3x that, 3x, 4x that. Yeah. So you have to be really diligent and responsible with how you're managing your credit so that you don't go into debt or overspend. And that, I think, is a reflection of who you are as a money manager and a person. Because for a lot of folks, it can be easy to rack up debt when they see they have so much available credit.
26:42Elizabeth Ayoola:All right. Our listener, Eileen, asked about whether people cycle through credit cards, which means opening them, getting the points, using them, and then closing the card to move on to another card. Is this a common strategy, Erin? I'll say it's a strategy that will not work for you in the long run. That's because credit card issuers are looking for good customers. They want to build a relationship. These rewards cost them money. And so credit card issuers are not looking for fly-by-night churners, we call them, who kind of collect the points and then close the card and move on. This may have been a more common strategy in the past, years ago, but over time, all the credit card issuers have established their own set of guardrails to protect against this kind of behavior.
27:23So it's really not super possible these days. That said, I want to make sure I'm clear that if you open a card today, it does not mean that you're stuck with this card forever down the line. You're not getting married to this card. You can certainly open a new card. You can earn the bonus points. You can try it out for a year or two. And then after that, if you decide that you're just not getting enough value from the card or it's no longer a fit for your spending patterns, you can absolutely reevaluate. And the value of that sign-up bonus that you'll get almost always makes it worth it to try a card for the first year.
27:56But an important rule of thumb here is that you never want to close a card before the one-year mark because that's just the mark of a bad relationship with a credit card issuer.
28:05Sean Pyles:Yeah. So would they maybe be less likely to approve you for another credit card in the future if you do close before that one year mark? Yes, that's right. And they could even claw back some of the bonus points that you have earned. Oh boy. Okay. Read the terms and conditions, people.
28:17Elizabeth Ayoola:Yes. And when you say they, you mean that same issuer or any issuer? That same issuer.
28:22Sean Pyles:I do see how the strategy that Eileen mentioned could lower your credit score because closing a credit card can reduce the average age of your credit profile and also reduce the total amount of available credit that you have at hand, like we mentioned. And so in this case, just leaving a card open might be the better option. Is that how you approach getting the maximum benefit from your various cards long term? You nailed it. Closing that card will definitely affect your credit age and your available credit, which will affect your utilization like we just talked about. So here's what I like to do.
28:51If you've tried a card for at least a year and you're pretty sure it's no longer a good fit, maybe the annual fee is too high or it just doesn't fit your spending patterns anymore. There's a few things that you can do first before you cancel it. So if the card doesn't have an annual fee, that means it doesn't cost you anything to keep it in your lineup. So I'd recommend just holding on to it. Now, make sure to use it periodically, even just for small purchases, so that you keep the account open and you keep all that good credit age and credit history with it. But I would just keep it open in most cases there.
29:23And so if the card does have an annual fee, you could first see about downgrading to a card that doesn't have an annual fee or has a lower annual fee. So that would allow you to keep the card's credit history and the credit line intact. And you can just call the issuer and ask them what options are available to downgrade or product change your credit card. And we'll put a link in our show notes with more information about how to do that.
29:47Sean Pyles:Aaron, when someone is evaluating a card and considering whether they might want to downgrade it or maybe even cancel it, what should they be looking at? Well, they should definitely be looking at all of the benefits that come along with the card that you might not be thinking about in the everyday. day. And so, for example, many co-branded airline and hotel credit cards, they often earn high rewards rates on purchases with that hotel or at that airline. But for most other purchases that you make, you know, at the grocery store, at the gas station, most of those purchases will be earning just one times points on all your purchases, and that's not a great rate of return.
30:20And so if I was evaluating a card just based on that, I might decide to ditch that card after the first year because it's not a great earner. But I need to make sure to remember to look at all the benefits that the cards come with. So airline credit cards often come with perks like free check bags, priority boarding. Hotel credit cards often come with a free annual night certificate. And the value of those things, if I'm using them and I'm traveling, those can more than make up for the annual fee. And so they're worth holding for those reasons.
30:49Elizabeth Ayoola:Now, there are a lot of considerations beyond your credit score when you're thinking about how to manage your credit cards. And one that comes to mind is that while there isn't a specific limit to the number of credit cards that you can have before your credit score is impacted, each person likely has their own individual limit on how many cards they can reasonably manage without feeling overwhelmed. Erin, how do you stay on top of all of your cards? I think you have a higher threshold than most people I can think of. It is such a valid concern that so many people have because you're absolutely right.
31:21It can become overwhelming pretty quickly and it can be really easy to make costly mistakes that will hit you with big fees and really damage your credit. So like I said before, this is a long game. Go slow as you expand your credit card portfolio. Don't go from zero to 100 all in a day. So a good way to start is maybe branching out to a new credit card that's offered by the same issuer of a card you already have. So if you have an American Express card, a Chase card, they issue many cards under that brand. And so if you are opening a new card with an issuer that you already have, you're not juggling a new site, a new login, a new app.
31:58You'll be able to just log into your same account and see your new card there along with your old card. And so that's a good way to kind of ease into it. Then another tip I have is that some people may not know this, but you can actually request to change the date that your credit card statement closes each month. So that way, if you have multiple cards, it may help you to keep them straight. If they all have the same due date, that could help keep it simple. And so you could also set up auto payments that help you make sure you never miss the minimum balance each month to make sure that you're not making any costly mistakes.
32:28Sean Pyles:Well, what about all of the various rewards that you have to try to earn from these cards and maybe like a minimum for a signup bonus and making sure you have regular like charges on each of the card to keep them open. That just sounds like a lot to keep track of. Do you have some sort of spreadsheet and how much time do you spend managing all of this? I do have a spreadsheet. Of course. Yeah, but you know, there are really a slew of apps that have popped up in recent years that are designed to help solve this very problem. They help you keep track of your cards and your rewards. You know, of course the NerdWallet app can help you see and track all of your credit cards accounts in one place.
33:02And I also really like an app called AwardWallet. This helps you keep track of all your cards It helps you track all the perks and benefits, what we sometimes call the coupons that come along with a lot of these cards. And you can also input all your travel loyalty accounts and your trip plans, and it helps keep it all there in one place.
33:19Sean Pyles:So Erin, you mentioned you have 27 cards in your name right now. Do you find that you are using all 27 pretty equally, or do you find you have one or two that are your go-to cards? Definitely not carrying all 27 around with me on the daily basis. You don't have your baseball card folio with you everywhere you go. No. So there are cards that are in my wallet always that are really good earners on everyday spend. So there are some cards that are really good at the grocery store, and I'm constantly going to the grocery store, and those are kind of a mainstay in my wallet. There are other cards that rotate their categories every quarter, and so those cards will kind of rotate in and out of my wallet depending on what bonuses they have that quarter.
34:02I will always have whatever new cards I have open that I'm working on the minimum spending period because meeting that minimum spend to earn the bonus is a critical part of that game. But then, like I said, I do have a good stable of cards that I call sock drawer cards that live in my sock drawer and I keep them active in order to take advantage of the benefits that they have, mostly travel benefits like lounge access and free check bags.
34:27Sean Pyles:We didn't even get into your digital wallet. Are you a digital wallet user? Or do you have all 27 of your cards loaded up on your iPhone or whatever smartphone you have? I don't have all 27 because that would be a lot of scrolling at the checkout if the wrong card pops up. I have a few in there, but not a lot. And is there anything that's really surprised you or maybe been easier or harder than you expected as you got into this game over time that you think would be helpful for folks to know? I think that one of the things that makes me kind of successful in this game is that I am fearless in it, meaning that once I opened a few new cards and I got the hang of how it feels to manage multiple cards, I'm not scared to apply for a new card because I know that the short-term ding to my credit by applying for the card and having someone view my credit report is pretty minimal.
35:19and I know that my credit is a good place. And I also know that in a lot of day-to-day life, it doesn't matter if my credit score is 800 or 750. That really matters when I'm taking out a loan or making a big purchase, buying a house. But I'm okay with my credit fluctuating in that way. And so I've gotten to be kind of fearless over time.
35:39Elizabeth Ayoola:Well, Erin, I think the biggest takeaway for me, because as I said, I have five credit cards and I have lots of fees, is that it's important to have a system in place if you plan to do this and you plan to have a lot more credit cards. Anything else you think those hoping to break into the credit card optimizing game should be aware of when it comes to their credit and just day-to-day management of credit cards? I'll give you a few tips here in a second. I will say that our writers, our nerds, have dedicated countless hours to researching these very things. And so I'll drop some links in the show notes with some really beginner-friendly tutorials of how to tell you how to manage this stuff.
36:16But for me, you know, So opening and managing multiple credit cards is super rewarding, but mismanaging them can have really real consequences. And so if earning lots of rewards is your goal, it is imperative, like we talked about, that you do not carry a balance, full stop. If you don't trust the temptation to have large amounts of credit available to you and to not go crazy at the mall and charge beyond your budget, don't play this game. Don't do it. And you don't have to open 10 or 20 or 27 or 51 cards either. If you've had one card you've used for many years, just considering adding one new card this year, earning a nice bonus, earning some new perks, that can help jumpstart your rewards and make your credit card journey a lot more rewarding, just one card at a time.
37:00Sean Pyles:Wonderful. Well, Erin, thank you so much for coming on and talking through all this with us. Absolutely. Thank you so much for having me. And that's all we have for this episode. Remember, listener, that we are here to answer your money questions, so turn to the Nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.
37:19Elizabeth Ayoola:And we want you to join us next time to hear about when you can pull back on saving for retirement. Follow Smart Money on your favorite podcast app that includes Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
37:33Sean Pyles:Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy The info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
37:43Elizabeth Ayoola:This episode is produced by Tess Vigland. Hilary Georgie helped with editing. Nick Kirsomy mixed our audio. And we want to say thank you to NerdWallet's editors for all their help.
37:53Sean Pyles:And with that said, until next time, turn to the nerds.
38:03Sean Pyles:Hey, Smart Money listeners. we have a brand new email newsletter, and it's completely worth signing up for, especially since it's free.
38:10Elizabeth Ayoola:Every issue has clips from recent episodes, links to stories you might have missed, and also behind-the-scenes commentary from me, Sean, and our producer.
38:20Sean Pyles:Some of it is stuff that doesn't make it into the episodes. The context, the moments, the takes we didn't plan on sharing.
38:25Elizabeth Ayoola:You can think of it as the group chat for smart money fans. I'm going to be sharing inside details about parenting and money. Yes, I'll be sharing all the juicy stuff.
38:35Sean Pyles:And I'll have loads of tips about what I'm doing in my garden. So if you want to putz around your garden like I do, sign up for the newsletter. And also, you know, we have money tips and all that kind of stuff. So head to nerdwallet.com slash podcast to sign up. Again, it's free.
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From the publisher
Learn how to donate effectively for Giving Tuesday and juggle multiple credit cards without hurting your credit score.
How can you donate more intentionally on Giving Tuesday without blowing your budget? Does having multiple credit cards hurt your credit score? Hosts Elizabeth Ayoola and Sean Pyles discuss charitable giving and credit card management to help you support causes you care about while protecting your finances. Joined by Grace Nicolette, Vice President of Programming and External Relations at the Center for Effective Philanthropy and co-host of the Giving Done Right podcast, they begin with a discussion of how Giving Tuesday started and why intentional giving matters. They share tips and tricks on setting a realistic donation goal, choosing causes that align with your values, and spotting nonprofit red flags beyond “overhead ratios.” Grace also explains how to plan giving throughout the year, how to research organizations using public filings and news coverage, ways to overcome “do-gooder paralysis,” and the benefits of involving family and friends so giving becomes a shared, values-driven habit.
Then, NerdWallet credit card and travel rewards expert Erin Hurd joins Elizabeth and Sean to discuss how having multiple credit cards (and we mean multiple!) can affect your credit score and day-to-day money life. They discuss why the number of cards you have matters less than how you manage them, how credit utilization and credit age really work, and why aggressive “churning” — opening cards for bonuses and quickly closing them — can backfire. Erin walks through how a large card lineup can actually help your utilization if you avoid overspending and always pay in full, why she treats card collecting as a long game, and how business cards may not show up on your personal credit report. She shares tactics for deciding when to keep, downgrade, or cancel a card with an annual fee, how to get value from airline and hotel perks, and how to avoid feeling overwhelmed by multiple accounts using tools like aligned due dates, autopay, spreadsheets, and digital tools such as the NerdWallet app.
Resources discussed in this episode:
How to Upgrade or Downgrade Your Credit Card: https://www.nerdwallet.com/credit-cards/learn/how-to-upgrade-downgrade-your-credit-card
7 Credit Card Tips Everyone Should Know https://www.nerdwallet.com/credit-cards/learn/credit-card-tips-everyone-should-know
How to Stay Organized When You Have Multiple Credit Cards https://www.nerdwallet.com/credit-cards/learn/stay-organized-multiple-credit-cards
I’ve Had 80 Credit Cards. Here’s What I’ve Learned. https://www.nerdwallet.com/travel/news/multiple-credit-cards-what-i-learned
Want us to review your budget? Fill out this form — completely anonymously if you want — and we might feature your budget in a future segment! https://docs.google.com/forms/d/e/1FAIpQLScK53yAufsc4v5UpghhVfxtk2MoyooHzlSIRBnRxUPl3hKBig/viewform?usp=header
In their conversation, the Nerds discuss: mutual aid, community fundraising, grassroots giving, community foundations, expressive giving, philanthropic trends, giving circles, BCU funding, nonprofit audits, IRS nonprofit status, legal issues nonprofits, administrative overhead myth, nonprofit sustainability, tax deduction limits, adjusted gross income deduction limits, itemizing charitable contributions, donor research tools, nonprofit annual reports, avoiding donor overwhelm, values-based decision making, recurring donations, family giving conversations, business credit cards and scoring, issuer family rules, credit card guardrails, signup bonus minimum spend, annual night certificates, free checked bag benefits, priority boarding perks, rotating bonus categories, rewards tracking apps, travel loyalty programs.
To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email podcast@nerdwallet.com.
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