Is More Than One Credit Card Really Necessary?

Nowadays, it’s not rare to hear about people with multiple credit cards. Not just two, but three or even more. And while that might sound crazy, it does make sense in certain situations. However, it’s not for everyone, and it’s something you should never approach lightly if you’re planning to go down that road. Taking out multiple credit cards can have various implications on your finances, and it’s important to be careful about it.

That said, it can also be a useful approach if you know what you’re doing. It can give you access to various special deals and promotions that are not normally available to regular customers. In some cases, some discounts alone can completely justify all the fees and interest you’re paying on those credit cards.

The Average Case

For most people, a single credit card can do just fine. As long as the limit is high enough to cover most monthly expenses, the card can easily be used as an everyday payment tool. And if the person is careful enough to pay off what they owe on that card as soon as the bill comes in, then there’s no problem in the long run.

Some people decide that their limits are not enough on a single card, or take out a second one to help paying off the debt they’ve accumulated on their original card. But that’s a slippery slope, and not a path you want to go down. Especially if you’re not familiar with using a credit card in the first place.

Benefits of Multiple Cards

Having several credit cards at once can be useful when it comes to certain special promotions, as we mentioned above. Some cards might give you accumulating bonuses if you spend them in certain places, which is a major reason for many people to take out new cards in general. However, you have to be careful in those cases to ensure that you will actually be able to take advantage of those programs properly.

In other words, how often do you actually shop at the participating stores? You might think that you’ll be going there often enough to justify taking out a second credit card, but in some cases that could be far from the truth. You need to be careful with this, because otherwise you’ll be stuck with a card that you’re not using for anything.

Credit Score Impact

And that brings us to another important point. You need to learn how a credit card impacts your credit score, and what happens when you take out multiple ones at the same time. Some people underestimate the impact of this on their own finances, only to end up disappointed in the future once they realize how much they’ve ruined their scores.

Sometimes even closing a card can have a negative impact, so plan ahead and know what to expect in the future! You don’t want to put yourself in a compromising situation where you can’t even close your current lines of credit without jeopardizing your score even more. And yet, that’s exactly what many people end up doing without even realizing it until it’s too late.

Active Utilisation

A credit card is only good if you’re actively using it, as we pointed out above. If you can’t see yourself doing that on a regular basis, it’s probably not a good idea to take out that card in the first place. On the other hand, you also shouldn’t push yourself into using the card too much without paying attention to its limits and your own finances. This can lead to a whole new range of problems on its own, and you may eventually find yourself stuck paying off large amounts of debt without any viable way out of the situation.

Taking out a loan can help you in those cases, but it’s not a universal solution. And it’s certainly not something you should rely on when it comes to paying off a credit card in the first place! Plan ahead, understand your financial situation, and know what your reasonable limits are. Otherwise you’re going to be in a lot of trouble later down the road.

In the end, having multiple credit cards is not bad by itself. But it’s also not something you should treat lightly, and you should pay special attention to all the negative implications it might have on your finances. If you’re prepared to deal with all of that, then by all means, open up another line of credit and start building up those bonuses!