Do you need more than one credit card?

December 15, 2006

If you currently have one credit card, you may be wondering if you need another card as well. Although one card was enough a while back, you now need more spending power to accompany your higher wages and think another card would be a good idea.

On the other hand, you might have more than one card already and wonder if it is really necessary to have extra cards. Although there is no definite answer, there are benefits and drawbacks of having more than one card. To help you make an informed decision, here are some useful hints and tips about having more than one credit card.

Having greater financial options

One of the main benefits of having more than one credit card is that you can be fairly certain that at least one of your card types will be accepted wherever you go. If you are going to have more than one card, then make sure they are different cards – such as one Visa and one MasterCard. This way, you can be sure that you can use credit in virtually all places that accept some form of credit.

Different features

Different credit cards have different features, and so you might want more than one card to take advantage of this. If you travel a lot but also want cash back on purchases then getting both an air miles card and a cash back reward card might be a good idea. This means you can get the benefits of both features, whilst also having increased spending power.

Keeping finances separate

Another good reason for having more than one card is to keep various purchases separate. For example, if you regularly buy items from the Internet you might want to keep one card specifically for online use. This will allow you to keep track of the purchases online more easily, and make sure that your statement is correct. If you want to keep various expenses separate, then having more than one credit card might be the answer.

Risk of overspending

However, there are dangers to having more than one credit card. The main danger is that you will have the power to spend more money than you can realistically repay, which could leave you in serious debt and harm your credit rating. If you are find it hard to be disciplined with your spending, then it may be better to stick to one card.

Hard to manage your finances

With more than one card, it can be extremely hard to keep tracking of your spending, and you might miss mistakes on your statements. It is better to have all the information in one place so that you can clearly see how much you have spent. Checking different statements can be confusing if you are searching for a specific item or trying to work out your expenditure for a certain period of time.

One card or many?

As to whether you should have one card or a number of cards; it really depends on your individual situation. However, if you can afford to repay the debts on more than one card, then it can be useful to have one in reserve in case one is lost or stolen. However, if you use your credit card infrequently, then sticking to one card is probably best, as it will allow you to easily monitor your expenditure each month.