By Herb Weisbaum ConsumerMan
msnbc.com contributor
updated 10/4/2011 12:47:47 PM ET 2011-10-04T16:47:47

Maybe you've been getting more credit card offers in the mail lately. I know I have. Because of the sluggish economy, credit card issuers are looking for new customers. If you're thinking of adding another card to your wallet, you may be wondering if that extra card will bring down your credit score.

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A lot of people ask me how many cards they should have. My reply is always the same: it depends. That’s because the answer is different for everyone.

For people who can't control their spending, one card is too many. For others, having 10 cards is no problem. It all depends on your financial situation and what you do with those cards.

Adam Levin, chairman of credit.com, says for most people three or four cards should be plenty:

  • A rewards card of some type that is based on your shopping preferences.
  • A low-interest rate card for emergencies or major purchases that you can’t pay in full when the bill comes.
  • A card for business-related purposes.
  • A card with no transaction fee for when you travel outside the country.

Levin says if you keep the balances low, pay your bills on time and don't get in over your head, having more than one card can actually boost your credit score.

"Available credit is a positive thing if you use it responsibly,” he points out. “It can be a destructive thing if you become irresponsible.”

How can having more credit help your credit score? It’s simple. One of the major factors used to determine your score is the percentage of available credit to the amount of credit used. The lower that ratio, the better it is for your score.

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Here’s an example of how that works. Let’s say you have one card with a $20,000 credit limit and your outstanding balance is $4,000. Your debt-to-use ratio is 20 percent.

But what if you have two credit cards and each has a $20,000 credit limit ($40,000 total credit available)? With a combined outstanding balance of $4,000 on those two cards, your debt-to-use ratio is 10 percent.

In this case, two cards are better than one because of the extra unused credit you get by having that second card.

Right now, banks are pushing their rewards cards. That’s because people who have them tend to spend more.

In its October issue, Kiplinger’s Personal Finance published a list of the best rewards cards for cash back, gas and travel. Remember: rewards cards are only for people who pay off their bills in full each and every month.

ConsumerMan: Cash-back cards may be costly in the long run

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 5.09%
$30K home equity loan FICO 5.21%
$75K home equity loan FICO 4.67%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.34%
13.34%
Cash Back Cards 17.82%
17.82%
Rewards Cards 17.07%
17.07%
Source: Bankrate.com