Unlocking the potential of credit cards can be a game-changer in managing finances and maximising benefits. Yet, the question persists: How many Credit Cards should I have? Exploring multiple credit cards reveals both benefits and risks, influencing your finances in many ways. Let's explore the nuances of managing multiple credit cards and how to navigate this landscape effectively to reap the rewards while safeguarding financial well-being.
How many Credit Cards can you have?
You would be surprised to know that there is no limit as to the number of Credit Cards you can own. If you own multiple Credit Cards, it can significantly impact your credit score and also increase your buying power.
Applying for multiple Credit Cards at once
Yes, you can apply for multiple Credit Cards at one go! Each Credit Card application will be considered and reviewed separately. However, you should remember that handling multiple Credit Cards can be tricky. You must have only as many Credit Cards as that you can handle without denting your credit score.
Advantages of having many Credit Cards
- Increased spending capacity: Each Credit Card comes with a certain credit limit. Having multiple Credit Cards increases your spending limit. If you completely utilise the credit limit of one Credit Card, you can always use the next one.
- Improved credit score: Credit Cards are linked to your credit score. The usage of every Credit Card will increase or decrease your credit score depending on your credit behaviour. Therefore, using multiple Credit Cards and repaying your Credit Card bills timely will increase your credit score. Having multiple Credit Cards keeps your utilisation ratio low, which increases your credit score.
- Rewards and offers: Another reason behind the popularity of Credit Cards is the rewards and offers they bring with them. These rewards can help you save a lot each time you spend. Many people apply for Credit Cards exclusively based on the rewards and offers they get.
Disadvantages of having many Credit Cards
- Potential debt trap: A primary reason to have multiple Credit Cards is higher credit limit. If you are a high spender, then you might end up exhausting your credit limit and using multiple Credit Cards. This can eventually lead to a debt trap that may be hard to escape.
- Higher overall charges: Having multiple Credit Cards can result in increased charges. Credit Cards involve multiple charges like annual fees, interest, penalties etc. If you don’t act wise, you might end up paying hefty Credit Card charges.
Impact on your credit score
Credit Cards directly impact your credit score. The number of credit cards you choose to have is an individual decision. Having multiple credit cards ensures that your credit utilization ratio is low, which can increase your credit score. Additionally, using multiple credit cards and repaying them regularly also contributes to a higher credit score. Conversely, failure to make timely credit card payments or maxing out all your cards can lead to a decrease in your credit score.
Tips to manage multiple cards
One crucial aspect of managing multiple cards is to stay vigilant about your credit score. A damaged credit score can pose significant challenges when seeking future loans. When using credit cards, it's essential to maintain a low credit utilization ratio and consistently pay all bills on time. Consider setting up reminders for due dates or automating payments to prevent missed payments. Regularly monitor your spending on each card to adhere to your budget and avoid overspending. Take advantage of alerts provided by credit card issuers for transactions, balances, and due dates to stay informed about your account activity. Familiarize yourself with the rewards and benefits offered by each card, and plan your spending accordingly to maximize rewards.
Ways to reap the benefits of having multiple Credit Cards
You should use a Credit Card with the highest rewards and offers for shopping. This can significantly reduce your cost of purchase. Keep your credit utilisation ratio of all your Credit Cards under 30%. Try to keep your Credit Cards as contingency. Having multiple Credit Cards ensures you don’t face a shortage of funds to meet the emergency.
Always select the right Credit Card that best serves your needs, and rewards you with multiple offers and discounts. Axis Bank Credit Cards offer you multiple options with each card bearing unique benefits. The application is entirely online and seamless.
Also Read: How do multiple Credit Cards affect your credit score?
Frequently Asked Questions (FAQs)
Q. Can too many Credit Cards hurt your credit score?
A. If you miss out on payments or fall into a debt trap, then too many Credit Cards can hurt your credit score.
Q. How many Credit Cards should I have at one time?
A. There is no cap on how many Credit Cards one can hold at one time. You can hold multiple Credit Cards at the same time.
Q. Should I have more than one Credit Card?
A. It depends on your needs. However, there is no harm in holding more than one Credit Card as long as you handle it responsibly.
