Credit card debt is on the rise again after a brief period of decline during the COVID-19 lockdowns, according to the Consumer Financial Protection Bureau in its latest semi-annual report.

As Americans begin to use plastic to fund more and more purchases, you may begin to feel burdened by the number of credit cards you have and even worry that the number of cards you have may negatively impact your credit.

But you should know there are several factors to consider before you make the decision to close a credit card account.

Americans on average have three credit cards and 2.4 retail (store) cards, according to credit experts.  There is no real barometer on how much credit is too much credit. The best indicator is your personal spending habits.

Some consumers prefer the rewards perks that come with certain accounts. For them, having several cards can help achieve greater rewards. Others prefer the simplicity that comes with having less to manage.

The truth is that there’s no ideal number of credit cards you should have. What should determine how many accounts you hold are your spending habits and ability to pay bills on time. After all, what matters more for your score are the credit habits you follow, regardless of the number of cards you carry.

Factors to Consider Before Canceling a Credit Card

Here are five factors to consider if you are looking to downsize the number of credit card accounts you have.

1. Be aware that closing accounts may hurt your credit scores. The reason is that when you close a credit card, you lose that card’s contribution to your available credit limit. Loss of available credit can increase your credit utilization ratio, which is a major factor in your credit scores. Your utilization ratio is your total credit card balance relative to your total credit limit on all your open credit card accounts. The closer this percentage is to zero, the better its impact on your credit scores. When you close an account, your utilization ratio can increase, hurting your credit scores.

2. Closing a credit card also reduces the average age of your credit accounts, which makes up part of your credit score. Essentially, the longer your credit history, the better your score will be. If you plan to apply for new credit in the next three to six months, you should leave the credit card accounts open until you complete the transaction.

3. If you are having trouble paying your existing debts, you might want to close the accounts to remove the temptation to charge more, even though your scores will likely dip.

4. Some cards also have hefty annual fees that you have to pay regardless of whether you’re using the card. In those cases, closing your card or switching to a no- or low-annual-fee credit card is worth the hit to your credit.

5. It’s important you monitor your credit. Real-time credit monitoring allows you to stay on top of your FICO® Scores. You also receive monitoring alerts for suspicious activity such as new credit inquiries, new loans and delinquent accounts that are reported in your name.

Remember, the number of cards you have does not directly influence your score. If having more cards means you use less of your available credit, that can help your credit score. But if having lots of cards makes your life complicated and you end up occasionally paying late, that can hurt your score.