These days it is common to have multiple credit cards. They give a person easy access to money. But have you ever wondered what impact does it have on your finances? Does owning multiple credit cards streamline your expenses or make you a spendthrift and increase your debt? To help you find an answer to this and many such questions, this article highlights some pros and cons of having multiple credit cards and detail how you can manage two or more cards without weighing down your monthly budget. You might want a card with a zero percent interest rate that doesn’t accumulate interest charges on a balance. Likewise, you might want a victoria secret credit card because you enjoy shopping there and the rewards and discounts pay off over time.
Multiple Credit Cards – The Pros
- Many outlets don’t except all credit cards. They either accept Visa or MasterCard. Thus keeping 2 or 3 cards of different banks/service providers will help you shop on the go without worrying about anything.
- If you have multiple cards, you can benefit from a wide variety of offers that are being provided on petrol pumps, flight tickets, hotel accommodations, etc.
- With multiple credit cards, you can use one as a primary card while keeping the other as a backup while traveling abroad. This strategy also works when your primary card does not work in an outlet. Look for cards with smart chip technology – which is widely accepted and offers good security.
- With multiple credit cards, you can save interest charges too. The facility of transferring a balance from one card to another is also possible if you have two or more credit cards.
- With multiple credit cards you can use the best card on a particular day/season on which cash back, rewards, gifts, discounts, bonuses and other benefits are being offered.
- With more than one card, you can build a strong credit rating.
Multiple Credit Cards – The Cons
- Multiple credit cards may lead to more spending and more debt eventually.
- More than one credit card can push you into dreaded debt if you don’t use it wisely.
- Too many credit cards can negatively affect your credit score. Also, banks may deduce that you have multiple credit cards because you are unable to pay your outstanding credit for one card.
- Multiple credit cards are difficult to manage because it leads to many bill payouts each month, forces us to keep track of miscellaneous bills, remember the different cards credit limit, PIN number, etc.
Credit cards are very useful for an individual if used wisely. It provides money instantly at the time of need. Having multiple credit cards will not affect your credit score if the outstanding amount is paid on time. A word of advice: Never utilize your credit card limit to full. Try to use not more than 30 percent of the total credit limit. Pay bills on time. Set the automatic payment reminder to avoid missing the bill payment due date.
In the present day, people spend money actively to lead a happy and lavish life and credit card provides them instant money disbursal. Credit cards are good for big-ticket purchases. Let’s take into consideration the scenario wherein you want to buy an expensive thing and you can’t afford to pay the entire amount in full; this is where a credit card can be used to pay for the stuff in full. Later you can spread the amount in suitable EMIs to pay off the balance.
As long as you pay your credit card EMIs in full and in a timely manner, you will not have to spend extra money. But if you miss the deadline, the additional interest will be levied on you by the bank for late payment. With the arrival of GST, the average interest rate is 18% which is why you should settle your debts on time to avoid additional interest payments.