How many credit cards you should own?

Is it wise to have more than one credit card? Read on to find more.

Credit cards are changing the way we shop

Credit cards popularity is gaining momentum not only in not only metropolitans but in small towns and cities too. Many factors have contributed to this trend, the major ones would be demonetization and covid pandemic. And the additional perks such as discounts, cash-backs, travel benefits, and other benefits that come with these cards have managed to lure people to get them. But now the question arises how many cards you should have? One, two, or more than that? All the financial experts stress that there is no one-shoe-will-fit-all answer to that. You can get as many as you want but you should always keep in mind your credit requirement and how much do you spend. Let’s clarify that further by explaining the pros and cons in detail.

When it is a good idea to get several credit cards?

It would be beneficial to get several credit cards if you can maintain a good or low credit utilization ratio. A good credit utilization ratio is when you shift your expenses from one card to another. According to the expert’s utilization of your credit card should not exceed 30%, which is considered ideal. But this percentage seems difficult to maintain with just one credit card and that is where the multiple cards come in. Also, if you get a new card and keep the whole credit limit free, it would improve your credit score as well. Also, different cards offer different benefits which can be enjoyed if you have several credit cards.

When does having multiple cards starts to hurt your pocket and finances?

As we have discussed the pros of owning several cards then it is fair that we point out the cons of owning multiple cards. If you are a reckless spender and a shopaholic then it is advisable not to give in the temptation of having several cards. It would look disastrous on your credit score and you would end up paying heavy penalties for the non-payment of dues. Think about how that could crumble your financial stability.

So, in the end, it all adds up to it depends entirely on you on how many cards can you manage at one time. Do you have cash flow that would be able to support the way you spend? Because even on credit cards you have to ultimately pay off your dues. So, inform yourself and choose wisely.