Benefits and drawbacks of using multiple credit cards

Benefits and drawbacks of using multiple credit cards


According to a Reserve Bank of India report, the payment volume through credit cards stood at approximately Rs.3,76,960 million in October 2020 compared to around Rs.2,91,481 million in the previous month. This whooping growth of credit card consumption also indicates an increasing dependency of individuals on these payment cards. Moreover, to leverage the maximum credit card benefits, individuals also opt for multiple credit cards.

However, possessing multiple credit cards has some merits as well as demerits one must be aware of. Therefore, before applying for another card, individuals need to consider both these aspects to make an informed decision.

Benefits of using multiple credit cards 

Any responsible borrower can use multiple credit cards and reap the following benefits.

1. More reward points 

One of the best credit card benefits is its reward program. Since different cards come with customized reward programs, individuals can benefit from savings on almost all purchases with planned card applications.

Using different credit cards, individuals can thus earn significant reward points and offers at partner stores, and save on future purchases.

2. Card for specific purposes

Several types of credit cards are available in the market. While a credit card may not cover all the benefits, different cards can prove to be beneficial for varied needs. For instance, using a grocery card, individuals can avail of exclusive offers on grocery shopping that are not available on a fuel card.

3. The lower credit utilization ratio 

It refers to total credit utilization as against the credit limit available for an individual. Financial experts suggest keeping this ratio below 50% of the available credit limit as anything more than that will unnecessarily reduce one’s dependency on such facilities.

Hence, using more than one credit card would significantly increase the overall credit availability, individuals can distribute the spending evenly and limit the ratio. In this way, they also can use multiple credit cards to improve their credit scores.

4. Suitable financial tool for emergency backup

Any one of these payment tools cannot offer all credit card benefits, whereby such a card may also not be accepted everywhere. In that case, keeping a second card ready can help significantly, especially when one is traveling abroad.

Using a single credit card at all places can expose it to cyber threats. In the case of multiple cards, individuals do not need to wait for a replacement to arrive and start using another one.

However, users looking for a card that includes maximum security features can opt for the Bajaj Finserv RBL Bank SuperCard. Alongside robust security features, it also accompanies easy EMI options and an interest-free cash withdrawal facility, among others.

The card provider also extends pre-approved offers that simplify the credit application process and save a lot of time. Besides credit cards, such offers are also available for various financial products like personal loans, business loans, etc. You can check your pre-approved offer instantly by submitting your name and mobile number.

However, in case you want to apply for more than one credit card, you need to consider the cons of it as well.

Drawbacks of using multiple credit cards 

Following are some of the demerits of using multiple credit cards.

1. Hassles involved in multiple card tracking

With multiple credit cards, individuals need to keep track of multiple due dates, different payment amounts, and so on. It can make one’s financial plans more complicated when compared to possessing only a single credit card.

2. Multiple debts

Often such hassles lead to debt traps, especially if users are in the habit of overspending. Possessing multiple credit cards, it often becomes difficult to keep track of the total amount spent and if one is capable of paying the bills in time or not.

3. Accumulated additional charges 

Interest charged as per the credit card interest rates on unpaid bills after the due date is considerably high. Therefore, in case a person fails or forgets to pay the outstanding balance, he/she has to pay such charges, late payment fees, and other additional charges as well. While these charges for a single credit card are still manageable, the complications increase manifold when the number of credit cards is more than one.

Therefore, it is essential to learn about all the potential pros and cons of having multiple credit cards before applying. It will not only help in managing the finances better but also facilitate making the most of all the credit card benefits.

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