Are multiple cards a blessing?

Are multiple cards a blessing?

Credit cards have changed the entire way money is handled around the world. The number one reason why credit cards are so popular is because they are convenient and universal. Whether it is travelling internationally, shopping online or picking out your favourite cuppa at a coffee shop, your credit card comes to your aid just about everywhere. There is however a lot of caution issued around credit card usage, as they can turn into potential debt traps if they are used recklessly.

However, if you are a disciplined person by nature and can flex total control over your finances, multiple credit cards can be a big blessing. In fact, you may even be able to handle multiple credit cards and reap its advantages. In fact, judicious use of your credit cards can help your increase your credit score and thus give you timely access to credit. Whether it is home loan rates or car loan rates, a high CIBIL score of 750 and above (out of 900) will work to your advantage. Here is a list of how having multiple credit cards can put you at a vantage point.

Never be without money

The most obvious thing that comes to mind about credit card usage is the convenience it involves. With multiple credit cards on your person, you never have to bother about carrying around physical cash. Credit cards are accepted just about everywhere and even if one card does not work at a time or a transaction gets declined on it, you always have a backup when you are carrying multiple credit cards. Besides most credit card companies are efficient and cautious, so in case of a fraudulent transaction that is made on your card, in case your wallet gets stolen, you get to know of it immediately through an SMS immediately. You can immediately call up the credit card company and block your card and be assured that the loss is not a physical loss of funds from your account.

Use different cards for different purposes

If you are a disciplined and organized person by nature, multiple cards can be used for different purposes. For instance, you can keep one card reserved for shopping whether it is online or at a retail store, because it offers the best cash back policies. Another credit card may have tied up with a major airlines company, thus adding onto your frequent flier miles, thus giving you good deals or waiving off your entire ticket price in case you have accumulated a lot of air miles. Spending small amounts on multiple credit cards not only gives you the advantage of organizing your expenses it helps you keep exact track of your outflow.

Better reward points and better payment facilities

Each credit card comes loaded with some reward or the other. Some offer better cashbacks, some add on to your frequent flier miles and yet others get you the best deals every time you refuel your car. When you carry multiple cards you can gain from the best advantages of all the cards and reap the benefits of multiple rewards from different credit card companies. But before you do that, it is must for you to understand the reward structure on each card. Before you pick out the credit cards, make sure you check out the reward points on each and pick the ones that are best suited to your needs.

Also when you are making small purchases on each of your credit cards that come with different billing cycles, you have the advantage of staggering your payments instead of having to pay all the outstanding amount at one go. This saves you money and also helps you have better control over the outflow of your money.

Improves your CIBIL score

Finally, multiple cards when used simultaneously also enhances your overall credit limit and thus keeps your credit utilization low. Credit utilization is the total amount of credit you are using as against the total credit made available to you. Financial prudence advocates that your credit utilization should not be more than 30-40%. When you are using multiple credit cards and spending small amounts on each you automatically end up keeping your credit utilization low and thus improving your CIBIL score over the long run.

Thus, as you can see, the multiple usage of credit cards, comes with a whole host of advantages. The caveat to this is that you must be a disciplined user and make timely payments on each of your credit card. If you fail to do this, or do not have any control over your spending, your credit card will not only land you into a pile of debt, your credit score will come crashing down. Thus when you are using multiple cards use them with extreme amount of caution and care and see it boosting your CIBIL score as well as your confidence in your money management skills!

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