Santa Claus comes around just once a year. In the meantime, there are Credit Cards.

The Ideal Number of Credit Cards that You Should Have

The benefits offered by a credit card, if availed smartly, can raise your financial conveniences to a higher level of possibilities. If you are already using a credit card and considering applying for another one but wondering if that would be a wise move, the tips listed here should give you a clear idea of the ideal number of cards that you can have. 

Assess your needs: Before deciding to apply for a new credit card, be very sure that you really need one. If you want to apply for the card just because you would have access to a higher credit limit so that you could spend more on things that you don’t really need, it may not be a great idea to have another card. 

Be sure of your repaying capabilities: One of the most crucial things to consider before getting a credit card is your repaying capacity. If you are struggling to pay the outstanding on your current card, it’s likely that you find it difficult to manage the new card as well. 

On the other hand, if you are convinced about your ability to repay the dues regularly on all your cards, you can certainly apply for the new card. Also, while considering another card, don’t forget to check out the one-time and the recurring charges associated with it to arrive at the best option for yourself. 

Prominent benefits of having more than one credit cards:

More reward points:

The higher the number of the credit cards, higher is the reward points that you can accumulate. And more credit card reward points implies better redemption options. Thus you can save more on categories like dining, shopping, travel, and many more. 

Category-specific cards:

Having multiple cards gives you the liberty to have category specific cards for popular categories. For instance, using a travel credit card for travel ticket bookings and hotel reservations would give you attractive travel benefits and deals. Likewise, you can have specific cards for categories like online shopping, groceries, dining, etc. 

A chance to build a strong credit history:

Using more than one credit cards give you the chance to build a strong credit history. One way of doing this is by keeping the credit utilization ratio on the card below 30%.  

The credit utilization ratio is the percentage of the available credit that you use during any particular billing cycle. And this ratio is very important for you to build a solid credit history. 

Things to take care of:

Don’t apply for multiple cards at once:

Every time you launch a credit card, an enquiry about your credit history is launched by the bank or the lending institution. These are also called ‘hard queries’, and too many hard queries would cause your credit score to plummet. 

So it’s wise to space out the frequency of your credit card applications and thus, protect your credit score from dropping. 

Avoid the temptation of welcome gifts:

If the only reason to apply for a new credit card is the attractive benefit that you get at the time of the card issuance, you should reconsider your decision. You should have more and solid reasons than just these one-time gift to apply for another card. 

The ideal number:

After comprehending the various points mentioned here, it’s not difficult to conclude that there isn’t any pre-set or fixed number for the credit cards that one can use at any particular point in time. 

However, it should also be kept in mind the number of cards should not exceed your due repayment capacity. This way, you ensure smooth handling of the cards while enjoying all the benefits that they provide. 

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