Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
Having multiple credit cards has its own set of advantages and disadvantages. While managing several credit cards can be quite a challenge for an individual, if used smartly, having more than one card can also be a boon. People are often tempted to apply for many credit cards because different credit cards come with different features and exclusive benefits. For example a travel credit card is suitable only for travel related expenditure and will give maximum rewards only if used for travel purposes. This is why many people tend to have different credit cards for different type of spending.
There is no harm in applying for several credit cards at the same time because each application is reviewed and considered separately. On the other hand, it is also wise to be a little cautions because managing a number of credit cards can get challenging.
This depends entirely on the type of credit card that the applicant holds. For example, if an individual holds a diverse range of credit cards that are very different from each other in terms of usage and benefits, then it is okay. Let's say, one is a travel credit used for travel-related expenditure and the other is a rewards card used for regular purchases. The travel credit card is not ideal for regular purchases made in supermarkets, etc, while a regular credit card is not ideal for travel expenditure. Hence, it makes sense because you cannot get maximum rewards points and travel related perks on a regular credit card.
According to research, most people have around 3 to 4 credit cards. While there is no ideal number, what is important is not how many credit cards a person holds but how well all credit card accounts are being managed. If well managed, this can open doors to more perks, benefits, cashbacks and rewards.
Many credit cardholders wonder if it is beneficial to hold multiple credit cards. Having multiple credit cards have both pros and cons. Though having more than one credit card and not paying your dues on time can affect your credit score negatively. But, if used wisely, having multiple credit cards can be beneficials. There is no ideal number of credit cards you can own. You can own as many credit cards as you want as long as you are eligible for it. However, having multiple line of credit can make you look like a desperate borrower and increases the overall available credit. If you do not maintain the right credit utilisation rate, your credit score may be reduced.
Also, in future, when you apply for a loan, the number of credit cards you own may affect your overall repayment capacity. However, you can reap the benefits of holding multiple credit cards in the following ways:
Yes, having more than 1 credit card can often add up to credit card debt if not maintained properly. Banks conduct a thorough check of your credit score, credit report, etc. before giving you another credit card.
The advantages of holding more than 1 credit are many such as it helps in building up your credit score, adds to your credit limit which can be used during emergencies and other additional benefits in the form of reward points.
It is advised not to hold more than 2 credit cards at once. However, if you are holding more than 2 credit cards and are able to repay the amount on a monthly basis, you may hold up to 3 credit cards.
Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.
