Can we use multiple credit cards? This is a common question many of you must think about. Credit cards are useful for shopping and paying bills. It can get you multiple benefits. Why not have multiple cards to increase the benefits?
In this blog, we will check some of the pros and cons of using multiple credit cards. Once we have enough information, it will help us make the right financial decisions and strengthen our position.
In the last decade or so, the use of credit cards has become one of the most effective tools in India. Although a major portion of people are now using these cards, their financial knowledge is still quite low. Look for a Credit Card DSA to have first-hand information.
Once you get a credit card, you can use the card to pay your bills and shop. In return, you need to repay the amount within a month. To make things more interesting, credit card companies have started giving coupons and rewards to those who use their credit cards. Let’s look at the multiple credit card issue in detail.
Is It Legal to Have Multiple Credit Cards?
We have asked an expert this same question. According to her, it is perfectly legal to have multiple credit cards in India. Although there are no restrictions, whenever you are using a number of cards, confusion can happen along with fraud. There are several aspects regarding credit cards we need to be careful of.
What are the Benefits of Having Multiple Cards?
Our aim is to look at the pros and cons of using multiple credit cards to understand the complete scenario.
- Boost Your Credit Score
Those who want to improve their credit scores rapidly should start using multiple credit cards. You should already know that the credit utilization ratio is important for the credit score. When you have multiple cards, you get a much bigger credit limit; your utilization ratio automatically comes down.
If you are already using a major part of your credit limit, you need to have another card to balance things out. Look for an expert who can guide you through the process.
- Easy to Get Reward Points
We have already told you that most credit cards get us reward points. That’s why it is good to have multiple credit cards so that you can have all those points and cash them. Suppose there is an offer to buy tickets for a match. People who use certain credit cards to buy the ticket will be offered the option. Unless you have that credit card, it is not possible to have the offer.
- Longer Interest-Free Spending
Every credit card comes with an interest-free time. If you repay your bill before that time, you can enjoy an interest-free period. This is true for each credit card. When you have multiple credit cards, you will enjoy more interest-free time.
- Aim for Higher Credit Limits
Finally, we can have approval for a card with a higher credit limit. Either you can have a single card with that many credit limits or use multiple ones to match the credit limit. Choose carefully the option that will be the best for your fortune.
Disadvantages You Might Face
Apart from benefits, there are some disadvantages as well. Here are some of them-
- Credit Is Not Overly Good
When you buy something using a credit card, you create debt. Excessive debt is not good for us. If you fail to manage these existing debts, your credit score will suffer greatly. Once your credit score falls, it will become difficult to get further loans or credit cards.
- There Might Be Some Extra Charges
If you are managing multiple credit cards, it is common that you end up spending more. There might be some extra charges connected with these cards that you don’t know. Consult with experts who have Axis Bank DSA registration and can guide you properly.
- It Is Easy to Fall into A Debt Trap
We have seen so many people falling into debt trap for using multiple credit cards and not paying their debts on time. Once the permitted period ends, you will have to pay a huge interest rate on your loan amount.
After carefully checking all the aspects, it is safe to say that you can use multiple credit cards and get benefits, but you have to be careful not to make any silly mistakes.
