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Pros and Cons of Having Multiple Credit Cards

2008-05-20

Oftentimes, cardholders are afraid to carry multiple credit cards. For some, it's pretty tough to manage many cards, to track the bills and be on time with all credit payments. Some people believe that having multiple cards can negatively affect their credit report. There is also a big temptation of maxing out plastics and so on.

It is generally recommended to have from one to three credit cards, depending on your financial habits. But the cases are not rare when people benefit from having multiple credit cards. According to the study conducted by the Center for Media Research, 51% of US cardholders carry two or more plastics. It looks like customers split on this issue. Learn more about pros and cons of carrying multiple cards!

Contrary to popular opinion, holding multiple plastics may be beneficial. There are some reasons for carrying multiple cards. One of them is safety. Having one card, you can face certain problems. Like it or not, but plastics may be lost or stolen. That's why keeping one zero-balance emergency credit card in a safe place would be a wise thing. This way you may rest assured that you've got a lifesaver in case of emergency.

Speaking of safety, it must be also mentioned that extra credit card will stand you a good turn if you making online purchases. It's no secret that online shopping imposes certain dangers and unfortunately you can easily become a victim of fraudulent activities that today come in abundance.

Probably, the most popular reason of having multiple plastics is credit card rewards. In view of the fact that today card companies offer a wide assortment of cards with rewards programs, it's not that difficult to enjoy numerous perks rewards plastics give you.

But still, this rewards credit game has some pitfalls. Most cards with rewards are generally come with higher interest rates, so you may accrue a heavy debt instead of great rewards. That's why it is recommended to pay off the entire balance on these cards every month to avoid unforeseen debt problems.

Anyway, there are a great number of people who handle an array of rewards cards perfectly well. Some of them never buy presents for special occurrences as they redeem their credit rewards for gift cards. In addition to that, they save a large sum of money on certain purchases. Great discounts, special offers, free hotel stays or online tickets - it's so hard to resist the temptation!

Some customers believe that having too many credit cards may negatively affect their credit score. Oddly enough, multiple plastics can improve your credit greatly. When estimating your creditworthiness, creditors pay close attention to your debt-credit ratio. Once you have multiple cards, you have lots of available credit, and thus never have problems with credit score.

But again, not every customer has excellent money management skills. As for one man credit, for another it's debt. Handling multiple plastics is a definitely tough task for those who have just started establishing credit and have little experience.

Closing credit accounts can hurt your credit score, especially when it comes to old credit accounts. Once you have one or two plastics, closing one credit account can dings your score, as the amount of available credit will be shortened. Having multiple plastics, you can avoid this.

Another good reason for carrying multiple credit cards is leverage. When having many cards at your disposal you can play one bank to another for choosing the card with the best rate.

i've got five cards and it's ok with me, no problems dealing with carrying multiple cards