5 Reasons Why You Should Own At Least 2 Credit Cards

One is enough; two is too much? This is probably right, but not in the case of credit cards. We’ve heard a lot about therisks of owning multiple credit cards, but financial experts still advocate for holding at least two of these plastics if you want to maximize their advantages. One credit card in your wallet can satisfy most of your financial needs; however, two makes you a little smarter. Here is why. 

1. You earn different forms of perks

A credit card issued by a local bank can offer privileges different from a credit card offered by an international issuer. Make sure you own one local card and one international card. Although local credit cards are equally competitive as an international one, the game is about increasing your leverage in terms of rewards and perks. Credit cards issued by international financial institutions like BPI and HSBC have a unique type of partnership with merchants. On the other hand, locally issued cards from EastWest Bank or RCBC can provide simple bonuses and connections with local vendors. 

2. You have a backup card

Your credit card can tarnish over time. There might be a need for a replacement, which takes time. In the Philippines, you might need to wait as long as two months before your new card arrives. In this case, you need a backup card from another issuer for your purchases. If you have at least two credit cards, you can use the other one if your primary card gets lost, stolen, or damaged. 

3. You have a lower utilization rate

Your utilization ratio is a huge factor when computing your credit score. If you own one credit card with a limit of Php100,000, you can use up ideally Php30,000 max. On the other hand, if you have at least two credit cards with a Php100,000 limit each, you can use Php60,000 and still maintain a credit utilization rate of 30%. 

Higher credit limits mean lowering your credit utilization rate and increasing your credit score. More often than not, the credit bureaus would look at your spending in terms of percentage and not in terms of the total amount you’ve spent. 

However, a higher available credit limit should not trigger you to spend on unnecessary things. Remember, your privileges should not change good spending habits. You still need to keep your balances within your means regardless of how huge your credit line is. 

4. You can take advantage of different cut off dates

Cut off dates are essential since this is the time when the banks generate all your transactions and sum up your balances in one billing statement. If Card A’s cutoff date is every 5th of the month and Card B’s cutoff date is every 30th of the month, then you get to choose which card to use at a particular time. Say you need to buy a refrigerator today, March 10, you are smarter if you use card A. It would allow you to have 26 days before cutting off compared to Card B which gives you only 20 days before the bill gets generated. 

5. You can designate a credit card for a specific purpose

Owning multiple credit cards can be daunting, but if you have at least two, you can designate one for personal use and the other for business use. You can also set a credit card for daily purchases and the other credit card for big-ticket items or installments. Make sure you know the features of each card so that you can effectively use them based on those features. Some cards are great for online shopping, while others offer more discounts when used in physical stores. Some credit cards let you earn points faster, while some will let you generate airmiles for travel. 

Final thoughts:

Owning multiple credit cards can be useful to your credit score but can lead to more debts. Owning at least two credit cards can still be manageable in terms of paying off debts and maximizing perks. 

Before applying for a credit card, make sure you checked the features and fees of each one. You don’t just swipe for the sake of using these plastics. Whether you own one or more, you need to be aware of their advantages or disadvantages before allowing them a space in your wallets.