Credit cards. Some people love them and some people hate them. To some, these magical plastic rectangles can unlock limitless opportunities to the masters who respect their powers. However, these same magical pieces of plastic have also brought much doom and despair for owners as well.
At the end of the day, credit cards play a pivotal role in the lives of most Americans and their spending habits. Many folks have different perspectives on the use of a credit card. Some fear its potential and choose to limit themselves to one or no credit card at all. Others see tremendous benefit in having a pool of credit cards where they can leverage certain ones based on their perks.
For those who worry about having multiple credit cards, here are some reasons why it might be a good idea for you to consider adding another one to your wallet:
1. Compromised numbers
If credit card companies suspect fraudulent activity (whether it’s out of precaution or due to actual nefarious activity), they might freeze your credit card account without you knowing. This could make things difficult for you during situations like attempting to pay at the checkout register at a grocery store. Having a backup credit card in hand can help save you from potential embarrassment and heartache at that moment if you don’t have cash on hand, and you can take time later to figure out why your card didn’t.
2. Losing a credit card
Did you know it can take up to two weeks for issuers to send you a replacement credit card? While some can get a new card to you in as little as 24 hours, some can take as many as 10 business days. For this reason alone, you should consider having more than one credit card. (Credit Sesame tip: Never carry all of your credit cards at once. If you lose them, you could be stuck for weeks without being able to pay for a thing on credit, which could include items such as your insurance or phone bill. Given this scenario, you’ll ideally have at least more than one card—one to carry and one to stash.)
3. Unforeseen circumstances
It’s never guaranteed that every time you swipe your credit card that it will work flawlessly. The last thing you want to deal with is not being able to make a payment for whatever reason (broken magnetic strip, getting declined due to reaching your credit limit, etc.). Avoid the hassle and carry some backup. Assuming you don’t want to use cash, we recommend at least three credit cards—two to carry (in case one fails) and one to stash.
4. Maximize the perks
Not all credit cards are created equal. It’s common that most credit cards will offer some level of benefits for most purchases; however, the true advantage comes from using the right credit card for those items or services that offer the most rewards.
Do you have a specific retailer you like to shop with? Store cards often offer savings perks while airline cards offer miles and other travel benefits. Having multiple credit cards affords you the flexibility to maximize the rewards you can earn based on your spending interests.
5. Spare credit for emergencies
It’s never ideal to be in a situation where you are faced with an unexpected expense that you did not plan for. This is where having a low-interest rate emergency credit card can be handy. Having that credit available to you to take care of those pressing needs can be a “life saver.”
Let’s say you did not want to tap into your savings to take care of an issue like an unexpected auto repair; that extra credit card can help you avoid depleting your savings. (Credit Sesame tip: Avoid using your emergency credit card if not for a true emergency; however, be sure to keep your emergency credit card active by charging something on it at least once a year.)
6. Not all credit cards are accepted everywhere
While it’s common to see many vendors accept most credit cards, you don’t want to take the chance of trying to transact with the one vendor that doesn’t accept your card. Imagine the stress you’d feel fumbling to figure out what your follow up options are in the event you aren’t carrying cash or a debit card.
This is where having a separate credit card under a different issuer (example: Mastercard, Visa, Discover, or American Express, etc.) will be helpful. Chances are, having two different issuer credit cards will have your bases covered every time you’re at the checkout register.
How many is too many?
So you might now be convinced that having a few extra credit cards might not necessarily be a bad thing. Now you might be wondering how many credit cards should you have. You don’t want to go overboard; however can limit yourself based on the following rules of thumb:
- Your combined credit limit maintains a 30% (or less) utilization ratio. (That means you regularly use no more than 30% of your available credit.)
- You should ideally have a few credit cards you can use anywhere (not limited use credit cards, such as store cards). Remember that credit cards impact your credit, whereas debit ones do not.
- You’re getting the perks you want—cash back, airline miles, points. Aim to diversify on the credit cards to avoid redundancy.
- You don’t have more credit cards than you can track. Tracking your expenses is an important key to not overspending.
Bottom Line
Having more than one credit card can be very beneficial for you. It can get you out of a tough situation and provide rewards for everyday spending. Even though there’s a credit card for everyone, it’s important that you understand which ones are the right ones for you. In a sea of options, it can get pretty overwhelming trying to do the research by yourself.
Luckily for you, Credit Sesame’s machine-learning platform can simplify this process and provide personalized recommendations on the right credit cards for you. Sign up for a free account today and get your personalized recommendations instantly.
We hope that these tips will be useful for you. For more information on this or any of our topics, please pop over to our SesameThrive Community, and join the conversation.
