Having a credit card can be an ace up your sleeve in certain situations, however, if we do not handle it properly it can become a headache, even greater when we have several.
According to Bank of America’s recommendations for better financial habits, before deciding how many cards to have, you should consider how you will manage the weight of your debt, the health of your credit score, and your lifestyle needs.
Advantages of having several credit cards
– A card for online expenses: In order to keep track of expenses, you can have a card solely for this activity, in addition, this will allow you to be more aware of identity theft or fraud.
– A backup card: In the event of theft or loss, it will be important to have another card and thus cover any emergency that may arise, until the other one is replaced.
– For trips abroad: In case there is any problem with a card, it will be important to have another when we travel abroad since it will be difficult to immediately solve the problem being in another country.
– Obtain rewards: Each card can offer us different benefits, either because they allow us to accumulate miles, discounts at certain stores, among other advantages.
What to keep in mind when having several credit cards?
– One suggestion is to keep the accounts of the oldest cards open, even if a new card is requested: This will give us a longer credit history, which is good for your credit score.
– Use them to prevent them from becoming inactive: Although they are not large purchases, a recommendation is to occasionally use all the cards, even more so if you have several. This is because if they remain inactive, it can negatively affect our credit.
– It is not recommended to get a card just to improve your credit score. This is not a recommended strategy, because you can have a good score with both 2 and 10, everything will depend on how well you handle them, not on the number of cards you have.
– Be clear about how much money has been borrowed: It is very easy to accumulate debts with credit cards, without even realizing the amount we have spent. That is why it is important to be aware of the amount that has been borrowed. Requesting a new card to stop using others is not a solution either.
– Properly analyze if a new credit card is required: Obtaining several cards in a short time can negatively affect our credit score, which could cause that, if you want to buy a car or a house, you finally get shorter loan terms. favorable.
Recommendations for managing multiple credit cards
Having several credit cards is not a negative if you are responsible for their management. To avoid inconveniences there are some recommendations that we can take into account:
– Always pay on time: Reminders or alarms can be used to pay on time and avoid inconveniences, using online banking can be helpful, since it will avoid having to go to the bank.
– Not using all available credit: The ideal will always be not to use more than 30 percent.
– Have the necessary knowledge to manage a card: At first, just try to have a credit card to learn how to manage it, after about 12 monthly billing cycles, you could request another one Read More