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Pointers To Note When Maintaining Multiple Credit Cards


At a time when millennials of high caliber are able to make big money in no time and even have become extremely watchful of their finances and want to keep it spic-and-span, here are suggested some of the best ways forward for further streamlining them if you are keeping too many credit cards:

Pointers To Note When Maintaining Multiple Credit Cards

So, should you first of all be carrying multiple credit cards or just get going with one card? Here we'll elaborate a bit on this first and then take the main topic ahead:

Going by a single or multiple credit cards-What shall be the right strategy for the credit card user?

Personal finance experts here in factor in the user's age as well as his experience with the product to decide on the way forward. So, if you are new to the world of credit, you shall be better off maintaining just a single credit card and go on to learn the ropes. Here in as this credit instrument comes at a whopping cost (interest rate) of 40% per year, you need to use it wisely; make timely payments and pay the full dues on a month on month basis at all times possibly and not just the minimum amount due for a month and head on to establish a good credit history.

Basing decision based on age: Now when we consider another aspect i.e. age, a person aged 30 years can at the maximum carry 4 credit cards. This is ideally the highest number of credit cards that one can maintain i.e. to say that at no point one should have more than 4 credit cards. Also, for individuals in their 20s with a penchant for credit cards, they can at max have 2 credit cards.

So, if you don't want to impact your credit score negatively and want to avail future loans at lucrative deals, we suggest you go by the above mentioned parameters to decide on the number of credit cards you should be carrying. At the same time they need to be used diligently as any carelessness on your part would be heavy on both your pocket as well as financial credibility.


Now coming to our main topic, if at all our lifestyle demands that we possess multiple credit cards for an array of advantages on them, we can upkeep them using these pointers:

1. Be mindful of the repayment schedule of all credit cards: Herein what best you can do is that have different billing cycle say if the billing cycle for one card is on 1st of a month then for the second you can probably have it in the middle of the month such that you don't miss out on paying the due amount on each of these cards.

Another strategy suggested is that if you need to use your credit card on some day, use the one that will generate bill one month hence and refrain from using the credit card that is likely to issue the bill in next 5-10 days.

2. Credit utilization ratio or credit utilization rate should be watched for: Another metric that should be taken note of when you are in possession of credit cards is your credit utilization rate, also referred as credit utilization ratio. This is because it has a material bearing on a person's credit score. It is the amount of revolving credit currently in use by you divided by the total revolving credit available with you. For a layman, it can be understood as the amount of funds you owe to the credit card issuing bank divided by your credit limit.

3. Determine whether or not fee payable on all credit cards provides you enough value: You need to ponder over this aspect intelligently, as there is no point splurging on credit cards (paying different associated charges and fees) that provide you no value. And as discussed earlier if your lifestyle demands that you carry different credit cards for different purposes such as if you are a frequent air-flyer (travel card) or consume fuel (fuel card), you can definitely opt for them and avail the different benefits.

So, here you can also consider maintaining one no-fee credit card in your wallet or simply refrain from having cards that come with annual fees.

Read more about: credit card debt
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