A credit card isn’t just handy to facilitate various transactions anytime and anywhere. It has many other benefits like building and boosting your credit score and financing high-value purchases. So it’s worth owning multiple credit cards.
Here’s a look at how many credit cards you should own and why.
Benefits of Having Multiple Credit Cards
- A higher spending capacity
Your credit limit increases when you own more than one credit card. This will give you some extra spending power. You can use it to buy things of high value and meet additional expenses.
- Keeping a good credit score
Low credit utilisation can boost your credit score. Owning many credit cards can give you the golden opportunity to keep a low credit utilisation ratio on every card.
- Balance transfer facility
Once you have multiple credit cards, you can transfer the outstanding balance from many cards to one. Then you can repay the balance on that card according to your convenience.
Things to consider when applying for multiple credit cards
- Assess your needs
Ensure that you need more than one card to not later regret applying for another. It can also help you choose the right kind of credit card that suits your needs.
- Check your repayment capacity
With a high income that can easily help repay the credit of multiple cards, you can go for them.
- Check your credit score
Your credit score should be high enough to make you eligible to apply for many credit cards.
- Be aware of an added responsibility
You must check yourself from overspending just because you have multiple cards. You should also pay the balance of all the cards in full on time. Ensuring to do these can give you the confidence to apply for many cards.
How Many Credit Cards Should You Have?
There’s no ideal number of credit cards that you can own. It varies from one person to another as per his/her need, repayment discipline and usage pattern.
As you build up an experience of using credit cards, you can own more of them based on your financial reasons.
Here’s a look:
- Your first credit card
It lets you build and keep a good credit history that can help get future approvals for loans.
- Your emergency second credit card
Suppose you’re about to make an emergency transaction and your only credit card doesn’t work due to a technical error. The card may also get stolen, lost or misplaced. In these cases, a second credit card acts as a backup. Plus, during an emergency, the credit limit of a card might not be enough. A second card increases the overall credit and manages such situations.
Over time, you may apply for a third card if it’s highly rewarding to your spending pattern.
As your income increases, you may check your overall credit needs and add new cards accordingly. Certain credit cards offer better deals at partner merchants on popular spending like lifestyle, shopping, travel, dining, and so on. As per your preferences, you may add a few such cards.
Owning multiple credit cards has no disadvantage. Only choose the right cards meeting your needs and use them responsibly. Then you can enjoy the benefits of all your credit cards!