What Are The Pros and Cons of Having Multiple Credit Cards?

Nowadays, there is a trend going on of having multiple credit cards, owning multiple credit cards has lots of pros and cons. If you know how to use a credit card wisely? then it can add a huge advantage for you, but in the case of mismanagement, it can become a dangerous weapon for destroying financial health. Therefore you should know how to use credit card smartly? and what are the things you should be careful about?

Advantages of having multiple credit cards:

Low Credit Limit Utilization:

Using multiple credit cards can help to keep the credit utilization ratio low, but if someone owns a single credit card then there is a possibility to use the maximum credit card limit, which is very bad for achieving a good credit score.

Helps To Build Good Credit Score & Offers:

If someone has more than one credit card and uses 30% of the credit card limit, it will help to maintain a good utilization ratio which will indeed help to bring the credit score higher.

Along with this, those who own multiple credit cards and make the payment on time will get a very good credit score and the worthiness of individuals also increases with passing time, which allows them to access more credit limits as well as benefits of credit card.

Increases credit limit:

If someone can follow the above-mentioned rules then the credit limit will increase which will allow them to spend more yet keep the utilization score lower.

You can also find your credit cards useful in emergency situations. It can help you to cover some unexpected expenses or situations such as hospitalization or financial crises. You can also get an instant loan without documents against your credit limit to deal with such situations. The loan amount will be transferred from your credit card to bank account within a few hours. Also if you get a credit card loan you should stop using this card until the loan amount is paid in full. 

Disadvantages of having multiple credit cards:

Credit Card Trap:

People normally tend to keep several credit cards to opt for different offers, though data shows that many people choose multiple credit cards to pay one card’s minimum billed amount from another card which is a very costly matter and in most cases, they fall into the credit card trap. If you don’t have any other options left to clear off your dues, you can request your card provider for a credit card settlement

Difficult To Manage:

Every card has its own credit card billing cycle, credit limit, and payment due date, which is very tough to manage, and if someone misses one single payment it will not only attract huge credit card interest rate and other credit card charges like late payment penalties but also the credit score will decrease drastically.

Debt Trap:

Owning multiple credit cards normally leads to overspending which in turn adds to bad debt. You can save yourself from overspending by tracking your credit card balance regularly. If you are an Axis Bank credit card user you can check your axis credit card status from your net banking or mobile banking account. You can also make your axis credit card payment from there. 

How to get the benefit of having multiple credit cards:

To reap the benefit of having multiple credit cards use not more than 3-4 cards as these many cards will surely cover most or all of your needs. One you can choose for shopping as well as utility bill payment, the second one for cashback and rewards, and the third one is for special access to premium places and the last one is for refueling purposes. 

You can find the best credit card for online shopping as well as for other categories like reward points, cashback, etc. from our top 10 credit cards page

Also, try to repay the full billed amount within the due date and try not to use more than 30% of your total credit limit. If there is an emergency, pay the minimum amount due in credit card bill. Now if you are thinking about what is minimum payment in credit card bills, then you should check our credit card FAQ page. 

If possible try to make due dates separate as it will give you ample amounts of time to arrange funds to pay the credit card bill. Also, if you use a credit card bill payment app you can keep track of your due dates more conveniently and you can also get exclusive credit card payment offers too. 

How many credit cards should I get?

There is no such magical number for this question. For someone, just one credit card is more than enough, where another needs 2 or more cards to fulfill his/her needs. It totally depends on your budget and how you maintain your cards.

Having too many credit cards can make you look risky to the card providers, and it can hurt your credit score badly. Even if you maintain those accounts properly, you can become a potential liability to the card provider just because you have a number of credit lines open. 

So there are no magical numbers of credit cards that can be considered as too many. But having 3 to 4 cards should be enough. Also if you use only one credit card you should always be prepared with a backup payment method, because no one knows when something bad happens to your account and you need to block your credit card. 

If you want to know how to block hdfc credit card through net banking you should check our HDFC credit card FAQ page.

What is the ideal number of credit cards for a beginner? 

If you are new in the credit card world, then you should start with a life time free credit card or a credit card against fd. You should apply for a better credit card like the regalia credit card or flipkart axis credit card when you are confident that you can maintain your credit card properly. In this case, hsbc visa platinum credit card or icici platinum chip credit card can be a good option. 

So, there are lots of credit card advantages and disadvantages especially when there are multiple accounts open, but you can get the most out of them, you just need to use them responsibly. Also, you should always try to keep your utilization ratio lower and try to clear off your balances before due dates. 

If you apply for too many credit cards in a short period, it can affect your credit score very badly. Too many credit card applications will make you a riskier borrower than someone who applies less. Therefore you should know how use credit card properly and apply for new credit cards strategically. And always maintain a 6 to 7 months gap between two credit card applications.

After reading this article hopefully, you get all the answers regarding the advantages and disadvantages of credit card especially when there are multiple accounts open. Still, if you have any question/s, do let us know in the comment box and we will try to resolve them as soon as possible.


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