What are the advantages to having more than one card?
There are some amazing credit card deals out there – and most of them are only open to new applicants. Is it possible to apply for multiple cards, enjoy all the benefits and no risk? It may take a little bit of time management and monitoring but there are some great benefits of using multiple credit cards.
Enjoy all the rewards
From shopping vouchers, to air miles, you can generate a lot of rewards from having multiple credit cards and regularly using them. Managing the process carefully could give you free travel, experiences, purchases and – in some cases – free money in the form of cashback. The key point to remember is that to genuinely benefit from the rewards you need to clear the balance each month. That way you’re using the card to generate the rewards but then clearing the balance so you don’t have to pay the interest.
A lower risk of fraud?
Some people believe that multiple cards open you up to greater fraud risks, some say it’s the opposite. In reality, it really depends on how you’re using the card. A single card being used over multiple locations does present a greater risk than multiple cards used over fewer locations. However, it’s worth bearing in mind that multiple cards used over multiple locations will drive the risk up.
Providing you with a back up
Whether due to fraud or error, sometimes the credit in our credit cards simply isn’t available to use. In that situation, multiple cards can come in very handy, as if one of your cards doesn’t give you access to the credit you need you’ll always have a back up.
Boost your credit score
If you make multiple credit card applications in one go then you’re likely to negatively affect your credit score. However, holding multiple cards won’t in itself do that. Lenders tend to look at how long you’ve had a card and how you’ve behaved while a cardholder. So, if at least one of your multiple cards is a long-term card you’ll look like a much stronger borrower. Holding multiple cards over a period of time and making regular repayments on each one will also provide you with good credit history, which can make future lenders much more willing to extend new credit and provide you with a better choice of personal loans and guarantor loans.
Different cards, different purposes
Having multiple credit cards allows for greater personal finance organisation. For example, you might have one card that covers all your online shopping purchases. Perhaps that is the card that you most closely monitor for fraud and the one that provides you with the biggest benefits for buying online. You might decide to channel your spending through different cards depending on the rewards you need. For example, if you have a big trip planned then spending on the card that provides rewards in air miles can help reduce your costs.
Cutting the costs of your credit
The numerous deals available with respect to interest can make multiple card ownership very beneficial. For example, you can transfer the balance of an old, more expensive card to a new card that offers 0% on balance transfers until you’ve paid it off. If you need to make a lot of new purchases e.g. furniture for a new home or travel costs then a new card with 0% interest on purchases is more beneficial than sticking with a card you already have.
There are many advantages to having multiple credit cards just make sure you are not using the wrong credit cards. With careful management and monitoring transactions and spending you can avoid the pitfalls and enjoy only rewards.