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How Many Credit Cards Should You Hold?

Credit Cards

A credit card is a valuable financial tool that streamlines your daily transactions and financial management in multiple ways. It enhances convenience, allows for easy online purchases, provides reward points on spending, offers cashback on specific categories, and helps in building a credit score. 

However, often a single credit card just isn’t enough to cover all your monthly expenses or to maximise the potential benefits. This raises a crucial question – how many credit cards should you use? Or is it good to have multiple credit cards?

To figure out whether having more than one credit is beneficial, here is a list of the pros and cons of having multiple credit cards.

Pros Of Having More Than One Credit Card

Here are some crucial benefits of having multiple credit cards:

  • Diversification of rewards and benefits

Holding multiple credit cards helps you enjoy various rewards and benefits. You might have one card that offers exceptional cashback on groceries, another that rewards you generously for travel expenses, and yet another that provides exclusive perks on dining out. This diversification means you can maximise the rewards earning potential on spending across different categories.

  • Helps with credit utilisation

The credit utilisation ratio plays a significant role in your credit score calculation. By spreading your purchases across multiple cards, you can keep your utilisation low on each card, which positively impacts your credit score. Lower credit utilisation signals to lenders that you manage your credit responsibly.

  • Availability of backup options in times of need

If you lose your card, fall victim to fraud, or find your primary card unexpectedly declined, an extra online credit card allows you to continue managing your financial needs. This is particularly valuable during travel, business investments, or large purchases where you cannot afford delays.  

  • Capitalise on values from every single card

Besides rewards, credit cards often come with additional benefits. For example, with the IndusInd Bank Legend Credit Card, you enjoy discounted foreign currency markup, savings on fuel surcharge, flexible reward redemption options, and much more. Simply click on the apply credit card option, complete all the formalities from the comfort of your home, and start leveraging premium benefits that enhance your financial experience.

  • Increased spending capacity

More credit cards mean more available credit. This increased limit lets you manage larger purchases or invest in opportunities that may arise without maxing out any single account. You can even spread-out daily expenses across various cards and handle large transactions while maximising rewards and benefits. Hence, using multiple credit cards smartly helps you meet both short-term needs and long-term goals.

Cons Of Having Multiple Cards

While multiple credit cards may offer twice the benefits of a single credit card, you need to manage your cards wisely or it may lead to – 

Drawback Definition What to do
Higher management effort Tracking multiple billing cycles due to different dates can be complex. Use budgeting tools or apps to keep payments organised.
Potential credit score impact Multiple card applications can cause hard inquiries, temporarily lowering your credit score. Apply for new cards sparingly to minimise the frequency of hard inquiries
Temptation to overspend More credit availability may lead to spending more than planned. Make a clear budget and stick to it.
Risk of missing payments Multiple payments may increase the chances of missing due dates. Set up automatic payments or reminders.

So, before you apply for a credit card online, ensure that you are prepared to manage your credit responsibly.

So, How Many Credit Cards Should You Have?

There is no exact number of credit cards recommended for an individual. It depends on several factors, including your financial goals, spending habits, ability to manage multiple accounts, and the desire to optimise rewards or benefits. 

If you pay off all balances each month, can keep track of multiple accounts without missing or delaying payments, and can resist overspending, holding multiple credit cards might work in your favour. Put simply, the key to responsible credit card usage, whether you have one card or several, lies in responsible spending and payment habits.

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