How to Manage Multiple Credit Cards?
By Ankit Sharma
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Many a times, credit card holders are faced with the classic question as to how many credit cards should they own. These plastic cards have several benefits and so are a popular means of making payments. Be it for utilizing offers on them or for getting cash back on purchases or simply for convenience, they are used because they make life a lot easy and shopping a lot more interesting.

But along with benefits, they also have drawbacks. There are certain things that cardholders have to be careful about like high interest rates on balance transfer of previous months' bills, hidden expenses etc. On top of that, impulsive and reckless spending with credit cards can also lead to a debt trap.

How many credit cards a person owns depends on an individual's personal credit needs and spending habits. It differs from person to person. For some one credit card is enough whereas some may need more because of factors like repeated foreign trips.

Some people think that owning several cards can be risky, whereas some suggest that owning up to three credit cards is not as risky but is a practical solution to a person's credit needs. A question here arises as to why do people need multiple credit cards?

Need for many credit cards

Increasing one's credit limit

Many people go in for a second or third card in order to increase their credit limit. If an individual feels that the existing credit limit is not sufficient then the need for another credit card arises. Though when availing an extra card for this reason, one should remember that on maintaining sound payment history, credit card issuers may increase the credit limit on the existing card itself, thus, eliminating the need owning another card.

Ease of purchase

Many merchants do not accept all types of credit cards, that is, they may accept either Visa or MasterCard. There are also times when a card is rejected due to technical or other reasons, in these situations multiple credit cards are useful. If one card cannot be used to make payments then the other one acts as a backup.

Specialized services and benefits

Many cards provide maximum benefits when used for certain specific purposes such as Petro cards - which are beneficial on purchase of fuel for vehicle; or travel credit cards - which are meant for frequent travelers and provide specific benefits on air miles etc. Depending on an individual's lifestyle, a person can choose to avail benefits on a specific feature and use a card for that purpose only.

Online security

For those who use credit cards for online transactions should know that the chances of frauds are high during online transaction. Cases of credit or debit cards counterfeiting or cloning have become quite common these days. To avoid such frauds, some people keep a separate credit card with low credit limit for online purpose only. So, even if the details of the card are hacked, the damage is limited.

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Syed Arif (Posted: Jun 16, 2014)
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