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Top 5 Reasons You Need More than One Credit Cards

If you are ever short on cash, your first thought is to find a quick alternative. Your credit card gives this convenience. Beyond the obvious advantage of convenience, a credit card is a form of a quick short-term loan, which attracts little interest and as such, you get to enjoy the benefit of using a product or service and make the payment later. Although, many would argue that credit cards increase impulse buying and reckless spending but having a credit card allows you to keep track of your expenses thereby making you financially responsible. If you are in the process of making a decision about whether you should get a new credit card to add to the one you already have, consider the points mentioned here.

Complementary Purpose

Some credit cards offer cash back rewards, others offer free tickets and vouchers while some offer no interest on debt payment. You may find yourself grocery shopping in Walmart in U.S and tomorrow you are on a flight to Mexico, with multiple cards, you can dedicate different cards for different purposes.

For instance, a card that offers a discount and warranty on purchases may be dedicated to shopping while a card that offers insurance or free ticket can be used for traveling purpose. This way you can maximize the benefits accrued from each card simultaneously

Credit Ratio Benefit

How creditworthy are you? Lenders are interested in whether you will be able to pay back before they lend you money and what they look at is your credit utilization ratio. A low credit ratio means you are creditworthy while a high credit ratio will make lenders think twice before granting you a loan.

It might seem like owning multiple credit cards will increase your credit ratio rather than reduce it but it is the opposite. Think about it this way, if a credit card offers 1.5% discount on your gas subscription but you pay the full amount on grocery and restaurant expenses. Since you cannot live on gas alone, you need to spend money on other necessities. With multiple credit cards, your debt balance is reduced across the cards, which eventually increase your credit score.

Contingency Reason

The best form of financial backups you could have is credit cards. In the event of a blocked or canceled credit card due to perceived fraud by a card company, you will need to wait for a new one, which can hinder you from making transactions.

However, if you have more than one credit card, you can easily turn to another credit card, while you are waiting for the blocked or canceled one. Furthermore, some countries do not accept some credit cards, so it pays to have extra when you are abroad.

For Financial Security

The best form of financial backups you could have is credit cards. In the event of a blocked or canceled credit card due to perceived fraud by a card company, you will need to wait for a new one, which can hinder you from making transactions.

However, if you have more than one credit card, you can easily turn to another credit card, while you are waiting for the blocked or canceled one. Furthermore, some countries do not accept some credit cards, so it pays to have extra when you are abroad.

It Serves as a Fall Back

Emergencies are out of our control but they do arise. Naturally, a financially responsible individual will have an emergency savings account. Nonetheless, if the amount needed for the condition exceed your account balance then credit cards serve as a temporary reprieve for the situation.

A multiple credit card, in this case, is useful, because, it saves you from a heavy debt burden and increase your credit limit. As such, you do not need to overcharge your credit limit and you get to pay back on different days in small amount. You can also have a credit card strictly for emergencies.

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Credit cards are for everybody both young and old because of the many advantages derived from it. Multiple credit cards not only multiply these benefits for you, they give you extra. With many credit cards, you can pay off interest high rate debt with little or no interest rate at all through a balance transfer.

Credit card companies offer promotional rewards at all time, you should take advantage of these benefits while you can and increase your credit scores