Should you have multiple credit cards and how to manage them?

Why should you have multiple credit cards?

More Credit Cards Mean More Credit!

Having multiple credit cards will increase your total credit access. This will also reduce your overall credit utilization percentage. In times of need, it becomes a formidable challenge to arrange funds. But with the help of credit cards, you can immediately access appropriate funds for a particular cause.

More Rewards, Offers and Benefits 

Different credit cards offer various rewards and benefits, such as cashbacks, free subscription packs, exclusive discounts, airport lounge access, etc. Beyond this, credit cards also provide various promotional and seasonal discounts from a time-to-time basis on popular ecommerce platforms.

Financial Security during Emergencies

When facing emergencies or dealing with unexpected expenses, multiple credit cards can be a day saver and provide a financial safety net, ensuring you have funds at your disposal in times of desperation.

Why should you NOT have multiple credit cards?

Multiple Payments on Multiple Platforms

Managing multiple credit card payments is a tedious task. With so many payment dates and different payment platforms, it can be easy to get lost in the process. If you end up missing a payment, the penalty will be heavy.

The Impulse to Overspend

There are times when we become overly optimistic and spend without thinking. This is called emotional spending or impulse buying. In these situations, the desire to spend surpasses the ability to stay within our financial means and we eventually start abusing our credit cards in the name of instant gratification.

Possible Impact on Credit Score

Opening multiple credit cards in a quick time span may lower your credit score. This is due to multiple credit card inquiries and a less average account age.

Now, if you do decide to keep multiple credit cards as a part of your financial portfolio, consider the following strategies to effectively them!

Be Financially Disciplined

Analyze your ability to manage your credit cards responsibly and maintain timely payments. If you have a tendency to overspend and don’t like debt, it might be best to keep a lid on the number of credit cards you opt for.

Choose Credit Cards Wisely

Before you start applying for new credit cards, thoroughly research all options and compare different credit cards based on features, rewards, annual fees, and rates of interest. If you are a benefit seeker and are choosing a credit card to avail yourself of a unique benefit, then only opt for specific credit cards.

Stay Organized & Automate Payments

There are online fintech platforms from where you can effectively manage all your credit card payments. They have reminders and communication systems that help make you aware of all your payment due dates. If you don’t wish to use a 3rd party platform to manage your credit cards, you can do it manually as well. Just remember the due dates and stay organized.

Keep a Check on your Credit Score

Regularly monitor your credit reports and keep a check on your credit score from credit bureaus. If you see any discrepancy, report it to the credit bureau immediately. This is done to make sure you have a healthy credit profile.

Remember, being financially responsible and having disciplined spending habits are vital when you are handling multiple credit cards. Make sure to pay off all your cards on time. Use them, but don’t abuse them!