How Many Credit Cards Can You Own?

Every individual has different spending needs basis which he/she chooses a Credit Card. There are some people who think a single card is sufficient, while there are others who own different Credit Cards for every other need, be it travel, entertainment, daily shopping or others. Many people own multiple Credit Cards, but is it wise to have more than one credit card? Let’s get to know in detail:

• The most accepted method of payment
• Instant finance
• Improves credit score
• Unlimited offers, rewards, & cashback
• Avail insurance cover
• Assigned credit limit
• EMI facility
• Cash withdrawal in case of emergency

You can have any number of Credit Cards you find useful to have. While having multiple Credit Cards can be beneficial to you, having more cards than necessary is undesirable and can be troublesome. For most people, owning more than three Credit Cards can become unmanageable. So, you must own only the Credit Cards that you absolutely require at your discretion.

Let’s take a look at some of the important questions related to multiple Credit Cards:

How many Credit Cards should you have depends a lot on your lifestyle. You may prefer to live without using a Credit Card and avoid spending money you don’t have. On the other hand, you may do well by owning a utility bill Credit Card that earns you regular cashback or owning two different Credit Cards for everyday expenses and travel or movie-going experiences.

Yes, some banks allow customers to hold multiple credit cards, depending on their internal policies and customer profile. This is usually at the discretion of the bank and it’s best to check with the respective Bank or visit their website for eligibility conditions. Currently this facility is not available to all customers for AU Bank.

Multiple Credit Cards can allow you to enjoy a higher credit limit. For example, if one card issuer is offering you a credit limit of INR 2 lakh, having two cards from different banks can get you a total credit limit of INR 4 lakh.

You can explore Rupay, MasterCard and VISA cards. The different card avenues offer you flexibility and let you gain reward points and cashbacks.

To understand how your multiple Credit Cards will affect your credit rating, look at your credit utilisation ratio. Multiple cards can lower your credit utilisation ratio per card and help improve your credit score. Make sure that your credit utilisation is under 30% of the available credit.

You can set up an electronic clearance service debit with your bank account to make sure that your bills are paid on time. You can schedule your Credit Card bill payments on Mobile Banking AU 0101 App/NetBanking for AU Small Finance Banks Credit Cards.

Below are some of the advantages of having multiple Credit Cards:

• You can make use of the balance transfer facility. Multiple Credit Cards can help you avoid paying late fees. In case you don’t have funds at the time of making one of your Credit Card payments, you can use the balance from another card given that the due dates for both cards are different.
• Multiple Credit Cards offer you tremendous spending power. Again, your credit limit also increases when you use more Credit Cards. The extra spending power can be used to finance your high-value purchases.
• You can boost your credit score. By maintaining a low credit utilisation ratio on each of your Credit Cards, you can improve your credit score.

Below are some of the disadvantages of having multiple Credit Cards:

• You have to be aware of the associated charges of each of your Credit Cards. Multiple fees and charges are associated with owning a Credit Card, like annual fees, late payment fees, joining fees, reward redemption fees, cash advance fees, etc.
• Your credit score may drop as well. Multiple cards mean multiple payment liabilities and in case you miss out on paying one of your dues, your credit score can take a hit. So, you must be ready to take on the additional financial responsibility before owning multiple Credit Cards.
• You can slip into a potential debt trap. With multiple Credit Cards and a higher credit limit, you may spend recklessly, struggle to strike the correct financial balance and fall into a debt trap.

• So, you can have as many cards as you think would benefit you, but before doing so, make sure it won’t work against your financial goals and budget.
• You can look to avail a range of benefits with only one Credit Card, maintain excellent credit and earn good cash back without juggling between multiple Credit Cards.

Note: Issuance of card/multi-card is as per bank’s internal policy. To know more, please visit nearest branch.

Sources:

https://www.equifax.com/personal/education/credit-cards/how-many-credit-cards-should-i-have/

https://www.bankbazaar.com/credit-card/how-many-credit-cards-person-can-have.html

https://www.bankbazaar.com/credit-card/pros-and-cons-of-multiple-credit-cards.html