Having multiple credit cards can be a great way to take advantage of all the perks and benefits that come with having a card. While many people might assume that they need just one card, there are actually many reasons why you should consider getting multiple cards:
Easier to earn rewards
You can get points, miles or cash back from your credit card spending. And if you’re like most people, you probably don’t have a ton of money to throw around on non-essentials. With rewards cards, however, you can earn rewards just for purchasing things you already buy anyway.
If you have many credit cards with different reward structures — say 3% cash back credit card while another gives 2 points per dollar spent — it’s easy to figure out which card makes the most sense for each purchase in your life. Many other factors affect your decisions about which card is best for certain purchases: annual fees (many cards charge them), interest rates and more.
As financial advisors like SoFi suggest, “Upgrade from 2% cash back rewards to 3% cash back rewards for a whole year by getting approved.”
Easier to build credit
Credit cards are a great way to build credit. This means that you can get approved for more loans and other types of financial products down the road, provided you pay your bills on time every month. So it’s important to use your card responsibly: always make sure that you can afford to pay off what you charge within a month so that you don’t end up paying interest and fees on top of the actual charges.
Credit card companies also like it when their cardholders have multiple accounts with them since this shows that they know how to manage several accounts at once, which is an indicator of responsible financial behavior (and therefore makes them less risky as clients).
Easier to improve your credit score
A good credit score can help you get better interest rates on loans and credit cards. Because financial institutions know that you have a track record of paying bills on time, they are more likely to trust you with a larger loan or line of credit.
A good credit score can also help you get lower insurance premiums. Insurance companies look at your driving history and other factors when determining what premium to charge, but one of those factors is your credit score as well. If your score is less than perfect, then it might be worthwhile for you to try improving it before applying for car insurance.
Safer to travel with
When you travel, it’s best to leave your cash at home. By carrying credit cards instead of cash, you can protect yourself from getting robbed or losing your money in a natural disaster. Credit cards are safer than debit cards because if someone steals them, the thief won’t have access to all of the money in your account (just whatever is on the card).
Credit cards are a great way to earn rewards, build credit and make your money work for you. However, there are downsides to carrying multiple cards. It’s important to carefully consider whether or not having multiple credit cards is right for you before applying for any new credit card accounts.