Having more than one credit card for issuer depends upon their lifestyle, financial condition and ability to pay off debts on time. As long as you are financially responsible, you can get benefits from the usage of multiple credit cards while maintaining a good credit score. There is no illicit limit to have more than one credit card at a time to suit your financial needs; it depends on your requirement as there is the range of cards available in the market which comes with various benefits and rewards. You can click through various financial online portals to know more about it.
The important thing is to figure out for what purpose you need a credit card, rather than having several types of credit card. However, we have come up with some suggestions that will help you to work out on how many credit cards should you have and why?
Backup plan– Sometimes the credit card company freezes card without your prior knowledge if any counterfeit activity is detectable, in that case, you won’t be able to use your card until the issues are resolved from the credit card company, then you might need another way to pay for purchasing, financial needs, and another requirement. So, having more than one credit card will help you to overcome the situation.
Emergency Situation– If you do not have any savings or do not want to drain your liquid money unexpectedly, then using a credit card that you set aside only for emergencies will be helpful. Ideally, choose a credit card with a low-interest rate, no annual fee and a high credit limit to use only in the case of an emergency.
Below are the following types of credit cards available according to your requirement.
Standard Credit Cards: These are the most common credit card available readily from banks and other financial organizations. Standard credit cards are unsecured, which means no security deposit has to be given to prove that the funds cannot be repaid. Annual percentage rate(APR) calculated or offered may vary on these types of credit cards.
Credit cards with a reward program: One can redeem the points earned for the amount spent on the card to qualify for various rewards. Reward cards require an average credit score for approval.
Here are significant types of credit card which provides various reward program.
Cashback credit cards- Cashback credit cards help you to earn points for purchasing, the more you use this type of credit card, the more cash rewards you will receive. Some credit card offers a great cashback percentage with increased usage, and other cards offer a higher cash back percentage at a specific type of purchase and selected merchandise. These types of credit cards are suitable for those who pay off their balance on time, and if used correctly, cashback credit cards may help you to save a significant amount.
General Reward Credit card- It is similar to the cashback credit card, in which point gets accumulated towards the reward system. The general reward credit card offers a variety of items to earn points from such as jewelry, flight tickets, hotel bookings, gift cards and more. These cards charge an annual fee and are best suitable for consumers who pay off their balance on time. By reducing financial charges, individuals will get enormous benefits from the rewards associated with this card.
Travel point credit cards- By this type of card, one can earn several points on purchasing air tickets and hotel bookings. There are extensive travel and hotel cards from which points can be redeemed for free stays at a co-branded hotel chain, upgrades in-flight, entry to the theme park and more. These reward programs can be expensive for credit card companies, so they charge an annual fee on travel credit cards.
Retail Rewards credit cards- From this type of card, points can only be redeemed through products purchased or services taken from a specific retailer. These credit cards are co-branded with major retailers like Amazon, Flipkart, and many more. The interest rate is higher on these types of credit cards, so try not to carry any balance due on retail cards.
Fuel cards – There are two types of fuel cards such as brand-specific and general. General cards give benefits to all fuel companies equally, while brand-specific cards favor a particular fuel company. These type of cards offers a cashback of 5% on purchasing fuel from co-branded companies.
There are several benefits to have different types of credit cards, but only if you can manage them appropriately. There is no perfect answer or number that can define how many credit cards you should have, but it is perfectly fine to have separate credit cards for every requirement. Although, yo need to maintain a good credit score if you wish to have multiple credit cards in your wallet.