Many people are afraid to have multiple credit cards. The pitfalls are obvious: you can lose the track of your bills and fail to pay on time. Or, you can buy a small thing here and there on different credit cards and spend more than you actually can afford. However, having multiple plastics can work to your advantage if you use them responsibly. So, what are the reasons to apply for more credit cards?
Keep a separate plastic for online transactions. It is convenient to buy in various online shops, but you can become a victim of an identity theft. A special card for such purchases makes it easier to track fraudulent activity. The plastic should have a minimum spending limit in case the information is hacked.
Keep a special "emergency" credit card in a safe place outside of your home. If your wallet is stolen or your house burns down, you will have a plastic to use while you are waiting for new credit cards.
Have a special plastic for work expenses which your employer reimburses. You will have less trouble going through credit card bills each month in order to separate personal spending from work expenses. The same principle can be useful if you are self-employed.
Get an additional source of money if your primary card is denied. For example, if you haven't informed your credit company that you are going abroad, they can freeze your account because transactions from another country may seem suspicious for them.
Maximize credit card rewards. You may have different loyalty programs, gifts, discounts and bonuses on different plastics. For example, you can have 20% discount in your favorite store on a point rewards credit card and accumulate bonus miles on a frequent flyer credit card.
Improve your credit score. Your financial activity and behavior are regularly reported to credit bureaus. If you are a responsible and trustful credit card holder, your credit score will go up.
Increase your percentage of debt or available credit. Your credit score will be higher if your debt is less than 30% of your available credit. Otherwise, it may seem that you are close to being overextended.
Plan your spending according to the billing cycles. For example, the billing cycle of your first plastic ends on the 10th of the month and the billing cycle of the second plastic ends on the 30th. So you can make purchases on your first card shortly after the 10th and on the second one shortly after the 30th. It will maximize the amount of time when you have to pay the bill.
There is no clear answer how many credit cards you should have. Some people are satisfied with 2 plastics; others carry 5-8 cards in their wallet. The general rule is: have as many credit cards as you can manage responsibly. So if you wish to take advantage of multiple cards, you have to use them wisely and stay on top of your finances.
