Is it smart to have multiple bank card in your pockets?

Credit playing cards supply numerous advantages by way of rewards, sign-up bonuses, and elevated buying energy, however proudly owning multiple has its personal demerits. For one, the curiosity charged on rolled-over bank card funds is the very best in comparison with some other banking product.

Here are some benefits of proudly owning a number of bank cards. You can cut up your bills throughout playing cards and this may preserve your total credit score utilization low. Adhil Shetty, chief govt officer (CEO) of BankBazaar.com, explains this with an instance, “If your common month-to-month spending in your bank card involves ₹1 lakh and your credit score restrict on that card is ₹2 lakh, your utilization is 50%. If you cut up it throughout two playing cards for ₹50,000 every, and if every card has a credit score restrict of ₹1.5 lakh, the utilization is simply 33%. A decrease credit score utilization props up your credit score rating.” You may also use the cardboard that gives most rewards for a specific spend. For occasion, your life-style card might offer you enormous reductions on eating however not as a lot on grocery buying.

Note the disadvantages too. Multiple playing cards can imply a number of cost dates to trace. If you miss a due date, you will want to pay a late price and different penalties, and your credit score rating will take successful. You may even fall right into a debt lure if you happen to overshoot your bills. Amol Joshi, founding father of Plan Rupee Investment Services, says that problems come up if you happen to miss the due date for cost or if you don’t make the total cost . “For occasion, the lender will cost you excessive penal and curiosity prices, which is able to adversely have an effect on your credit score rating,” he says.

How many do you need?

Experts say it is up to an individual to decide on how many credit cards are needed. What is essential, though, is to have the right card and utilize it effectively. For instance, a travel card is useless if you are not a regular traveller. Also, it is better to keep an eye on your expenses.

“One size doesn’t fit all. The number of credit cards you should have depends on your financial situation and spending habits. It’s important only to have as many cards as you can manage responsibly and pay them off fully by the due date. A good rule of thumb is to have no more than two or three credit cards,” says Raj Khosla, founder & managing director (MD) of MyMoneyMantra.com.

Vishal Dhawan, founding father of Plan Ahead Wealth Advisors, says, “We counsel a most of two to a few bank cards. One ought to with a decrease restrict that permits on-line transactions, from a threat administration perspective. The others ought to align with a person’s long-term wants, be it airport lounge entry or life-style advantages or particular and related rewards.”

Joshi says, “Keep solely two playing cards that may give totally different advantages. Also, it could be even higher if you happen to area out the distinction between the due dates of the 2 playing cards in a month.”

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