A business credit card can be an incredibly powerful financial instrument, and some business owners wonder how they can best leverage these tools. One way to get the most value from your business credit cards is to open several different accounts for a larger line of credit or to receive the rewards and benefits offered by different cards.

But can you have too much of a good thing? And how will having multiple business credit cards affect your credit history and credit score when you apply for a loan?

If you’re wondering if you have too many credit cards for your business, ask yourself the following questions.

Am I having trouble managing my business credit card accounts? When using either business or personal credit cards, the most important consideration is paying your bills on time. When you make late payments, you will incur costly charges at the penalty interest rate, as well as expensive late fees. And if you miss multiple payments, your personal credit history will suffer. If you are unable to manage all of your business credit cards responsibly, then you definitely have too many.

Am I being surprised when I receive the statements? If you receive credit card statements with larger balances than you expected, then you might have too many small business credit cards. Being surprised each month is a symptom of not keeping close tabs on your small business credit card spending, and that of your employees. One way to mitigate this problem is to configure alerts that notify you when your spending reaches a certain level. But even if you configure alerts on all of your accounts, it will be easier to manage your spending with fewer small business cards.

Am I getting value from all the credit card annual fees that I am paying? Even when you are able to manage all of your credit card accounts successfully, you might still have too many cards if you are paying unnecessary annual fees. For example, a premium travel rewards card for small business will typically offer airport business lounge access for a $450 annual fee. But if you haven’t been regularly using the lounge access, then there’s no reason to continue to pay the fee to keep the account open, especially if you have other cards with smaller annual fees. You shouldn’t be paying an annual fee for many small business credit cards unless you are receiving value from each one of them.

Business Credit Cards and Your Credit Score

When you are thinking about how many small business credit cards you need, an important consideration is how your cards will affect your credit history and credit score. Each credit card you have, including both personal and some small business cards, adds to your personal credit history (find out which business credit cards report to personal credit here). As long as you continue to make on-time payments, each account will benefit your credit history and credit score, but with diminishing returns as the number of accounts increases.

Having multiple small business credit cards will also increase the total amount of credit available to you. And as your total credit limit is extended, it will reduce your debt-to-credit ratio for a given amount of debt. Having a lower debt-to-credit ratio is a significant factor in your credit score.

Holding several small business credit cards will offer you a strong credit history and make it easier to have a low debt-to-credit ratio, but there are other things to consider, especially when applying for a home mortgage or another major loan. After applying for a major loan, you will want to abstain from applying for any new lines of credit until the loan closes, including small business credit cards. If you’re considering applying for a major loan in the near future, it can also help your credit score to pay off as many accounts as possible.

There can be advantages to having many business credit card accounts open and in good standing. These include the ability to earn rewards and receive cardholder benefits, while increasing your personal credit history. But when you have trouble managing all of your accounts, or you are paying too much in annual fees, then it’s a good indication that you have too many small business credit cards.

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