Having multiple credit cards can be a good thing. Of course, you should use them all wisely. Only spending what you can afford and paying off your entire balance in full each month is the best strategy for avoiding credit card debt.
Many people use credit cards to collect rewards, and you can too. Let me explain why you might want to have multiple rewards credit cards in your wallet.
1. Maximize your rewards
One of the main reasons to have multiple rewards credit cards is to maximize your rewards. How you earn rewards with each credit card can vary.
Some cards offer flat rewards on every purchase—for example, 2% cash back no matter what you buy. Other cards offer bonus rewards on select spending categories. You might earn 3 points for every dollar you spend on dining purchases with your card.
Having more than one card can increase your rewards. You can make strategic decisions about which credit card you use for certain purchases so you get more rewards overall. This is something that many fans of rewards credit cards do.
Here’s an example of why multiple rewards can help you earn more rewards:
Card No. 1: Earn 3 points for travel expenses
Map No. 2: Get 3% off grocery purchases
Map No. 3: Earns 2% flat bonuses
It makes sense to pay for all travel bookings with card #1 and grocery purchases with card #2. You can then use card #3 to pay for other everyday purchases outside of these bonus categories. Such a strategy can help you earn more rewards in the long run.
2. Earn rewards faster with welcome bonuses
Many rewards credit card fans jump at the opportunity to take advantage of welcome offers. Many credit card issuers offer welcome offers to eligible new customers. If you meet the minimum spend, you can earn a significant amount of points or miles.
If you’re planning a larger purchase soon, it may make sense to add another rewards credit card to your wallet to earn rewards faster through a welcome bonus. Just make sure you can meet the minimum spending without exceeding your means.
3. Maintain a lower credit utilization
Having multiple credit card rewards can also have a positive impact on your credit score. One factor that determines your credit score is your credit utilization ratio, or how much available credit you use. A lower credit utilization ratio is ideal—you don’t want to use all of your available credit.
By owning multiple cards and not using the full available credit limit on each card, you can maintain a lower credit utilization ratio, which can have a positive impact on your credit score.
4. Access additional card benefits
Many credit cards offer useful card benefits. The benefits offered may vary depending on the card, so having more than one credit card may allow you to enjoy more benefits.
If you’re looking for ways to improve your life, learn about the benefits that different cards offer. It may be beneficial for you to have more than one card, as it allows you to take advantage of more benefits.
Don’t be afraid to use more than one credit card
Thinking about applying for another credit card? It’s best to apply for a new credit card after researching what impact your actions will have on your finances and credit. But don’t assume that owning two or more rewards credit cards is a bad choice. It may be a great option for you.
Check out our list of the best cashback credit cards to learn more about the top choices of cashback cards.
