How many credit cards should you have?

Most of us settle for one house or one car, but when it comes to credit cards, we often get confused about how many credit cards are right for us. There is no rule regarding the number of credit cards you should have. What’s more important is to find the right credit card as per your requirements. Before choosing a credit card, you should always compare multiple options across different providers. For instance, if you already have an Axis credit card, you can apply for HDFC credit card that suits your requirements. Having credit cards from multiple providers also improves your chances of availing provider-specific offers on e-commerce platforms. 

Here, we have discussed a few things that will help you find the answer to “how many credit cards should I have?”

Is it good to have multiple credit cards?

Since most credit cards are designed to offer benefits on one or two categories, having multiple credit cards allows you to earn rewards and benefits on purchases across multiple categories. For example, if you have different credit cards for shopping, travel and dining, you can maximize your savings on each of these categories by using the right credit card. Moreover, having more than one credit card will also help you improve your credit score. With multiple credit cards, the overall credit limit increases, which helps you lower your Credit Utilization Ratio (CUR). 

However, apart from availing benefits, you must be able to manage each credit card you have. Before getting a new credit card, you should ask yourself whether a new card will add value or complicate your finances with further charges, bills and repayment dates. Remember that you need to repay what you are spending. Therefore, check whether the chosen credit card fits your spending pattern and lifestyle in order to make the most out of it.

Multiple credit cards can be a boon or bane, depending on how you are managing them. 

Suggested Read: Avoiding Credit Card Trouble

How many credit cards should you have?

As mentioned earlier, there is no magic number for this question. You can have a single credit card if it fits your lifestyle the best and is sufficient for your needs. However, you can also have multiple credit cards if you want numerous benefits as per your requirements. A single credit card can help you maximize your benefits but can never be the best for all your expenses. 

For instance, if you frequently shop online and often travel to your favourite destinations, then having a card for each requirement is justified. You can have a travel credit card that offers benefits like lounge access, discount on bookings, etc., along with a credit card that offers good value back on your online transactions. This way, you can maximize your savings on both categories. 

To answer the question, you can have as many credit cards as you want as long as you can manage each card with discipline, pay the dues on time and maintain a low credit utilisation ratio. Smartly managing multiple credit cards will also improve your credit score.

Tips on managing multiple credit cards

The more credit cards you have, the more work is required to manage them. You need to track several things like statement cycle, due date, rewards and other benefits. Here are a few ways how you can manage your cards responsibly:

Keep a track of terms and conditions: Before applying for a card, it is important to read about all the related terms and conditions to maximize your benefits. A few cards reward you with welcome benefits only after achieving a spending milestone during a certain period. Similarly, some cards come with restrictions on the rewards you can earn. Therefore, keeping track of all such things will help you manage your card efficiently. 

Pay your bills on time and in full: In order to save yourself high interest charges, which could ultimately lower your credit score, you should pay each credit card bill on time and in full. Paying only the minimum amount due will attract interest charges on the remaining balance and future transactions. To pay your bills on time, you can set reminders or automatic payments and save yourself from missed dues.

Review credit card fees & charges: Before applying for a credit card, you should analyze whether the fees charged by the card justify the benefits offered. You should also consider other charges such as foreign exchange mark-up fee if you intend to use the card overseas. A good look at the terms and conditions will help you understand your card better.

Know when to use each card: Understand the features and benefits of each card and plan your card usage as per the benefits offered by the cards. Knowing which card to use can help you maximize your benefits. For example; if you are shopping online, then using a credit card that offers better rewards on online shopping could be a sensible decision rather than using a card that offers similar rewards across all categories.

Having multiple credit cards can benefit you if you can handle them responsibly. You should keep a track of all the dues and charges so that you do not miss out on any of the payments. Have only as many cards as you can manage and use the right card for the right transaction to maximize the benefits.



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