The Ultimate Guide to Owning Multiple Credit Cards

Owning a credit card brings in several luxuries in life. People generally have one but many like to keep multiple credit cards.

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Especially with the wide variety that is available and attractive offers that the banks and credit card companies give, we are often bound to ponder if it is actually worth having more than one credit card.

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Let’s see how many credit cards are worth keeping!

Is having multiple credit cards necessarily beneficial? 

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When buying a credit card, one thing that you are most concerned about is your credit score. For some people, it is their credit score that inspires them to apply for a credit card in order to improve it. 

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When we look through this lens, having more than one credit card can actually be a great help for you as it keeps your credit utilisation ratio under check. 

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According to Investopedia, in order to improve your credit score, you must try to spend no more than 30% of your credit limit at any given time on any card.

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So the key takeaway is that if your credit utilisation ratio is below 30%, you manage your payments timely and can use your card pretty wisely, having multiple cards should never be an issue.  

How many becomes "too many"?

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There is no specific magical number as an answer to this question. It totally depends on your needs. You can keep one card for your personal spending and another for specific targeted spending like travel coverage, reward points, airline miles, business, etc. 

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Remember that even 2 cards can be too many for you, while for others, 4 can be a comfortable number. If you can’t manage to pay the bills, don’t drag yourself into this mess. It is far better to just have one and pay dues on time. 

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In addition, it is never a good idea to apply for too many credit cards within a short time period. 

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You must be aware of the 5/24 Chase rule- many other companies too have such rules for their own safety. This can hinder your applications in future when you may actually need one badly. 

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With too many credit cards, you may be considered a very risky borrower by the companies- lowering your credit score. Unless you have enough collateral or any other source of financial backup, don’t apply for multiple cards, as things may take a U-turn for you. 

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Moreover, multiple credit cards simply means more bills, so test your managerial skills before getting yourself multiple cards. 

The role of different benefits from different credit cards

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Having multiple credit cards can definitely provide you with an array of rewards and benefits on every purchase. For instance, cash back credit cards can help you get amazing cashback on your purchases. This can be given to you monthly or for specific purchases like petrol. 

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In another case, a store-branded credit card can help you get certain items from a certain store with amazing cashback deals. Depending on what you exactly want your credit card to do for you, you may or may not have multiple cards. 

Cards as a compromise?

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One reason to keep more than 1 credit card can be in situations where one and only card gets stolen. Before you inform the company, apply for a new card and everything, having an additional card is no harm since you can still carry on your transactions without any delay. 

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In another instance, sometimes when you travel to other countries, it may be possible that your company freezes your card by being suspicious of your activities. 

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In such severe cases, you will have to share some critical information with the company in order to confirm your identity. Till then, you can carry out transactions with your additional card. 

Can you apply for the exact same credit card twice?

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It is a good option to have an additional card for emergency situations. You can easily get approved from the same company for your additional card, especially if you have previously held a card. However, this doesn’t mean that you will be assigned the exact same card twice. The company will change the terms and conditions based on your current income and financial status- which must’ve changed since you applied for the first card. 

Should you often apply for new cards?

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In theory, you can apply for as many credit cards as you want. However, rules like 5/24 can limit your applications. 

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Applying for a lot of credit cards in a short span of time can become disastrous for you if you are unable to prove your creditworthiness. Therefore, it is better to avoid stacking cards- if only 1 can work for you, make it work for you. 

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Already being the owner of one or two credit cards can tell you exactly if you need or needn’t invest in another. For instance, if you are already diving deep into the debt pool, it is 

definitely not a great idea to increase your liability by investing in another credit card. However, if your credit card management skills are firmly polished and you find it not difficult to deal with debt or you end up having no debt at all, you may consider applying for one more. 

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It is not necessary that you have each and every type of credit card available on the market. If your needs can be served by just one, stick to it. If you, say, already have a personal card but since you travel a lot, you can apply for another travel credit card- just to help you gain the required coverage of travel expenses. In short, the number of credit cards associated with you must always depend on your needs and not just the urge to gain additional benefits for a limited time period. While having multiple credit cards can either help or hinder your credit score- depending on how well you can manage them.

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Credit cards are one of the easiest ways to get credit and spend on your terms. They are even profitable for your credit score if you use them wisely. Having multiple credit cards can be easy-to-handle for some and may perhaps be the opposite for some. 

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Decide what all benefits you exactly want and then decide the number and types of credit cards to apply for. 

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