The credit card industry is a multibillion-dollar industry, and all issuers strive to get customers to accumulate and use as many cards as possible. Credit cards are more than just a way to pay for things. True, they all have the option of making purchases and then paying off the available credit at the end of the month or dividing it over time. In reality, our credit cards play a significant role in determining our way of life. It is very common to see someone with several credit cards. Here we talk about the pros and cons.
- Perform transactions from any location
Not all credit cards are accepted in every country. In certain parts of the world, each franchise has a higher level of implementation. Having multiple cards from different issuers will save you time and money.
- Travel insurance
Travel insurance is one of the most valuable benefits that a credit card can provide to people who travel frequently. These insurances can cover a wide range of incidents, such as luggage loss or damage, flight delays, or cancellations. To do so, make sure you pay for your transportation ticket with a card that includes travel insurance.
- Commission-free international transactions
Some issuers offer free transactions in certain countries. It only makes sense to take advantage of this opportunity.
- Purchases are discounted.
Certain credit cards offer discounts on all purchases. In other cases, discounts are applied to purchases made at specific establishments.
- Increased credit availability
The vast majority of credit cards specify a credit limit that customers can use when making purchases. If the credit limit is reached, no further purchases may be made until all or a portion of the disposed balance is amortized. If you have several credit cards, you will be able to have a much higher total credit limit than if you only had one.
Using multiple credit cards has its drawbacks, and we recommend that you consider them.
- Increased total maintenance cost
Many credit cards charge a commission or annual maintenance and renewal fee. You will also have to deal with the multiple payments of this type of expense if you have multiple cards.
- The risk of borrowing beyond your means
The fact that you have more credit available does not obligate you to use it. Furthermore, you should only purchase on credit what you can afford.
What precautions should I take if I have multiple credit cards?
If the benefits of having more than one credit card have persuaded you, you should take the necessary steps to enjoy the benefits that this entails.
Don’t spend all of your available credit.
Having more than one credit card may make it easier to consume more than you should and exceed the available limit.
Don’t make impulsive purchases.
Having several credit cards will make you feel like you have more purchasing power than you have. Consider your expenses, and whether you need to make that purchase so you don’t end up regretting it later.
Applying for new credit cards to pay off old debts is not a good idea.
This is the most common and obviously the worst type of user error. Applying for a new credit card to pay off previous debts will be futile because you will end up deeper in debt than you were before.