Credit cards have become an essential part of our daily lives. They offer convenience, security, and rewards for each spending, which has tremendously changed the way we used to live. But, have you ever thought of having more than one credit card? Is it a good idea? Well, if you’re looking for answers to these questions, in this blog, let’s explore the pros and cons of having multiple credit cards.
Pros of Having Multiple Credit Cards
Maintain the Credit Utilization Ratio: The credit utilization ratio is the amount of credit you are using compared to your credit limit. Therefore, having multiple credit cards can help you maintain a low credit utilization ratio, which can eventually improve your credit score.
Improves credit score: If you have multiple credit cards then it will increase your credit limit, which can lower your credit utilization ratio as explained above. It eventually helps improves your credit score. Not only this, but with multiple credit cards, you’ll rarely fail to pay off your debt and hence improve your credit score. Moreover, it also shows lenders that you are a responsible borrower.
More Rewards and Cashbacks: Having multiple credit cards can help you earn more rewards and cashbacks. Each credit card offers a different set of benefits and cashback facilities therefore, more than one credit card means you multiply those benefits.
Increases Credit Limit: Having multiple credit cards can increase your overall credit limit. This can help you make large purchases that you may not be able to afford with a single credit card.
Extra additional benefits: Different credit cards offer varied benefits. For instance, some offer travel rewards and benefits, while others offer cashback rewards. Having multiple credit cards can help you take advantage of a variety of benefits.
Benefit from the interest-free period: Most credit cards offer an interest-free period on purchases. Having multiple credit cards can help you maximize the interest-free period, which can save you money.
Moreover, you can find all the pros in one credit card as well, if you choose the right option. For example, the Airtel Axis Credit Card offers a variety of benefits and comes with endless pros.
Cons of Having Multiple Credit Cards
Difficult to manage: Having multiple credit cards can be difficult to manage. You need to keep a track of multiple due dates, credit limits, and payment deadlines. It can also be confusing to remember which card to use for which category purchase. This can lead to major problems. Moreover, you’ll also change credit card pin for each credit card which is difficult to remember.
Increased debt risk: Having multiple credit cards can also increase your debt risk. You may be tempted to spend more than you can afford, leading to higher debt levels.
Risk of falling credit score: Having multiple credit cards can also increase the risk of failing to pay your bills, eventually risking your credit score.
In conclusion, keeping multiple credit cards can be beneficial only if know how to manage your finances well. It is important to understand your financial situation and choose credit cards that suit your needs. Ensure to use them responsibly and pay your bills on time.