Many people these days own more than one credit card. While it may be useful to have 2 or 3 credit cards, it it not advisable to posses too many of them. In such case it may become very hard to manage them all and also too many credit cards mean that you can get yourself into financial troubles when using one credit source to repay another, also called as debt spiral. However, in some circumstances having more than one credit card can be beneficial. Here are few examples when having more than one card can be a good thing:
(1) Having two different credit card types, like Visa and MasterCard
Most merchant accept both types, but there are still few out there who don’t accept one or the other. Having both types available can be handy and will spare you inconvenience of not being able to purchase goods or services you want. Also sometimes happens that processing network of one provider is down, but the other still works so you have alternative means to make the payment.
(2) Having one credit card as the main transactional and second as a backup
Sometimes you may run out of money or there is some unexpected bill. It would be ideal to have a financial reserve in form of cash on your current account, but many people struggle with that. In such case an extra credit card means to have extra money immediately when you require it. You don’t need to go to your bank, applying for a loan, waiting for the approval process and facing possibility that it can be declined.
It’s the Murphy’s rule that when you don’t need credit, banks are offering it to you and when you need it then suddenly there is some problem and banks are reluctant to provide it. So, think ahead and be prepared for any emergencies that may arise.
(3) Is it better to have two credit cards or just one with higher limit?
Well, it depends. Disadvantage of two credit cards is that you have to pay credit card account maintenance fee twice and also keep an eye on two different due dates for your monthly repayments. However, we believe that having two separate credit cards is still worth it. If you have just basic credit cards (not gold or low interest ones that charge higher fees) then the pros of two cards will out-weight the cons. Apart the pros described above, the main benefits of two cards are:
- It’s easier to keep the backup credit card locked in a closet and use it really only in emergencies
If you can’t manage to pay both credit card balances in full every month and avoid the interest then you may still be able to pay in full at least one credit card. If you combined both credit card limits into higher limit and had only one credit card then you would have to pay the interest for the whole credit amount used.