The conventional wisdom is that one or two credit cards are enough for most people’s financial transactions. Having too many will likely cause people to question your financial smarts.
Although having too many credit cards can indeed pose various risks, it’s important to note that it’s not always a bad idea. When you choose to have more than one credit card, it should be for the right reasons.
1. Collect Sign-On Bonus
Getting a sign-up bonus is one of the best ways to earn rewards. Various types of bonuses are available, and they can vary depending on the card’s requirements. Usually, a sign-up bonus is worth $500 or more, and it can be earned after you spend a certain amount using a credit card.
2. Earn Cashback
There are various types of rewards credit cards that are ideal for different types of purchases, such as gas and groceries. Some offer bonuses in various categories, such as dining, travel and streaming services. Most offer a good rate ranging from 1.5% to 2%. SoFi offers its customers a 3% credit card cash back. According to the experts at SoFi, “SoFi puts more money in your pocket with 3% credit card cash back for a year.”
3. Improve Your Credit Rating
Your credit utilization ratio is one of the most important factors that can affect your credit score. The agencies that calculate it take all of your reported credit card balances and divide them by your limit. This method determines how much credit you’re using and how much you have available. The lower your ratio is, the better it reflects on your credit score.
4. Mix and Match Credit Card Features
You may not find the features that you’re looking for in a single credit card. Having multiple credit cards allows you to mix and match the various features that you need.
You might want a credit card that allows you to get a free checked bag when you use an airline frequently. You may also want one that has elite status and offers free insurance for your cell phone. Some prefer credit cards that offer cash-back incentives.
5. Have Backup Payment Methods
Having multiple credit cards can be convenient when you need to replace an old one due to fraud or when you lose it. It’s not as bad as it sounds when you have several cards that you can use while waiting for a replacement. Having a couple of credit cards means you won’t be without funds when you need to pay for a purchase.
Although carrying multiple credit cards isn’t ideal for everyone, it’s possible to find some benefits to carrying more. For instance, if you’re a credit card enthusiast, carrying multiple cards could help you get more value. You can start slowly adding more to your credit cards, assuming that you’re still capable of handling the payments.
Every credit card company offers its customers a different set of perks. Research beforehand to find the cards that offer you what you want.