When it comes to money matters, it is only natural that many questions come rushing our head. Especially when we consider something new. People were hesitant about credit cards too when they came into being. But eventually as we realized that they are here to help us in financial emergencies, we became friends with them. Another question that comes to mind is what is how many credit cards should you have. Now every person and their situation is different from one another. What works best for some one can be disastrous to the other. Hence, let’s weigh our options carefully before we make a decision-
How is having multiple credit cards good
Multiple Rewards- The more the merrier. This is entirely true for credit cards. Different credit cards have different offers associated to them and are good for a specific type of requirement. In today’s lifestyle, we require everything. For such a situation, having many credit cards can help you in saving a lot of money by getting you lot of options. According to the kind of need you have, you can check out the Best Credit Cards and choose which ones works best for you.
Back-Up- How often do you forget how much money you had in your account or wallet? Have you ever been in a situation where your card was declined? Or even if you had enough balance, you forgot bringing it? We have been there too. Most of the times, having many credit cards has been a saviour since in any case. You can use a different card to make the payment at least for the time.
Fraud Protection- Did you know that if you use one credit card for all your transactions, you become more prone to a credit card theft since your transaction detail is present in a lot of places? Having many credit cards can help you in switching between payment options and reduce that risk for good.
Maintain flexibility- A particular card is not accepted at the exotic restaurant you thought for you dinner meeting tonight. What do you do next? You pull out another credit card that is accepted there. Because you were smart enough to carry many credit cards instead of one.
Diversify your credit profile- When credit bureaus calculate your credit score and evaluate your credit history, they not only take into account if you have paid your bills on time or not. Diversity also plays an important role in determining your credit worthiness. You can keep many credit cards in order to ensure that you ooze out the impression of a person who can juggle between cards and maintain credit in all of them. Goes without saying, you need to MAINTAIN your expenses in such a way that you can execute the trick.
To know the Tips & Tricks When Applying for a Credit Card, watch the video here:
How is having multiple credit cards bad
Confusion- Not everyone is born with multi tasking skills. Are you the type of person who gets confused when too many details are in front of you? Remembering offers from each card, utilizing them to the fullest and most importantly, remembering the due date and making payments on time might not be piece of cake for you.
Debt Risk- If you are the type of person we just defined in the previous point, you belong here too. You might miss your payments and accumulated expenses might leave you caught in a debt trap. If you do choose to opt for more than one credit cards, you need to make sure you maintain a healthy payment schedule to stay debt free.
Credit Score Risk- Any factor that can help build your credit score can also put it at risk. You can very well diversify your credit report using multiple credit cards. But if you forget maintaining your payment schedule, you might end up making late payments and this might reflect adversely on your credit report.
Things to take care of when making the decision
Do you need it- You need to ask yourself if you actually have a requirement for a new card. Once you have decided whether you need it there are certain things that you need to keep in mind before actually getting one. For example, once you have taken a credit card, you should keep it for at least 12 months before closing it. How often you open and close an account definitely reflects on your credit report and credit score and defines your credit worthiness to a lender.
Can you manage it- With great number of credit cards come great number of payment responsibilities. Only you can know your situation the best. Understand if you can actually take care of the expenses. And if you can make the best of your multiple credit cards.
Be smart enough- When it come to choosing the cards that will be versatile enough to fulfill all your needs, you need to be very smart. There are numerous credit card providers. They all give out offers on many credit cards. Choosing the right match for you is something that you really need to be careful of.
The final call about how many credit cards you should have
Now you have every aspect in front of you. We hope you can make the best decision for your money. Our two cents is that you track your spending habits, organizational tendencies and personal values for some time. Only after doing that should you make the decision of carrying multiple credit cards. Your credit report will be affected for each credit card you take. It is in your hands to direct that change towards good or bad.
