The Advantages Of Having More Than One Credit Card
Posted by Rishank Rautela on July 19th, 2019
There are times when you want to purchase something but you don’t have enough cash on your person or your debit card. At such times, you can swipe your credit card to pay for your purchases. Today, credit cards come with a whole lot of added security features which have played an instrumental role in reducing the rate of frauds associated with this financial instrument. Moreover, using this card and paying off your debt in time can help you improve your credit scores, which makes it easy for you to get loans approved in future. In fact, most people today, prefer to own multiple credit cards. Here’s how owning more than one card can prove to be advantageous.
It gives you a sense of financial security: Having more than one credit card can come in handy when you find yourself in an emergency situation. You could have utilized the maximum limit on your first credit card and may need to borrow some more cash. Whether you are strapped for cash in a foreign country or have to pay for a medical emergency, you can use your second credit card and make the payment. Just the knowledge of having an additional card can help you face financial challenges when the crop up and get you out of that situation.
You get a higher credit limit: The greatest benefit of owning a second or a third credit card is that your credit limit also increases. This credit limit on the second card is typically higher than the first card you own. An increased credit limit essentially means that you can spread your expenses over various cards and also make big size purchases. For instance, you can pay for international flight tickets or your loan EMI and so on.
You do not end up maxing out one card: Another crucial advantage of owning multiple credit cards in India is that that you do not utilize the maximum limit on one. Utilizing the maximum limit on one card alone can affect your credit scores negatively. This in turn proves as a hindrance when you want to apply for any sort of loan. Ideally, you can maintain a good credit score if your credit utilization on a card is approximately 30% to 40%. So, if you have a credit card with a maximum limit of ₹100,000 you should try not to swipe for more than ₹30,000 to ₹40,000 on it to maintain a good credit score.
You can earn reward points: A seasoned user of this facility knows that you can earn a lot of reward points that can be converted into actual savings. Each time you swipe your online credit card or for shopping in a retail stores, you become eligible for a specific amount of reward points. These accumulated points are converted into cash value and you can redeem these points by choosing from a large catalogue of actual rewards such as gifts and shopping vouchers. In most cases, the first card is a no frills card with limited benefits.
The trick to using a credit card is quite simple – you should use it responsibly. One shouldn’t look at this plastic money as a means to go ahead and make impulsive purchases that can cause a dent in their finances. If you use this card responsibly, you will find that it promote lots of savings, rewards and cashback. If not, you will find yourself in a mountain of debt and paying off accumulated credit debt, is really not a cakewalk. So, be responsible when you swipe that card.Also See: Credit Card, Maximum Limit, Credit Limit, Credit Cards, Credit, Card, Limit
A Book of Al Thatcher Card Magic by Gordon Boyd
After Hours Magic: A Book of Al Thatcher Card Magic by Gordon Boyd with contributions by Tom Craven, Stephen Bargatze, Gary Plants, Mike Powers, Dan Block, Steve Beam, Del Copley, Wynn Mertz, Nick Trost (Courtesy of H & R Publishing), Robert Bengel, Evert