Managing multiple credit cards? Here are 10 essential tips you need | Mint

A credit card is considered one of the most convenient financial tools for making emergency payments. It allows you to purchase an item when needed and pay for it later and provides various rewards. Several users prefer keeping multiple credit cards to take advantage of these rewards.

However, having multiple credit cards is a huge responsibility. It is important to strategise expenses in line with your credit limit and make bill payments on time, especially when you have multiple credit cards.

Check out the top ten key points that you should keep in mind if you own multiple credit cards.

Right credit card

If you plan to get several credit cards, make sure to get the right cards suitable to your expenses and finances. As credit cards offer many benefits, get a card suitable to your types of expenses that will get you the most rewards.

Make a budget

Before using multiple credit cards or planning to get many cards, it is important to make a budget to estimate how much money you can spend every month on these cards. This will help you not go overboard with many cards. Having a monthly estimate according to your finances will help you make credit card bill payments on time.

Fees on credit cards

Most credit cards charge an annual fee. Having multiple cards would be an added cost to every card. Apart from annual fees, credit card issuers also charge various fees such as ATM withdrawal fees, late payment fees, joining fees etc. Therefore, make sure to estimate all these cards before getting new credit cards.

Number of cards

Do not go overboard with the number of credit cards you own. However, there is no accurate number of credit cards that you may own. Get credit cards according to your financial capacity and expenses. Having too many cards can add to your costs as many cards charge annual and related fees.

Check credit limits

When you own multiple credit cards, there might be chances of losing track of the credit limit provided in each card. Therefore, it becomes important to keep track of your credit limit on every card to avoid going overboard with any of them. The credit limit of your card is set on the basis of your credit score and credit history. Spending beyond the credit limit can have many consequences such as transaction denial, fees, poor credit score etc.

Check credit card statement

A credit card statement summarizes the expenses made on your card. When you own many cards, it becomes essential to review them continuously to check if all the transactions are correct. This will help you report any unauthorised transactions on your card. This step becomes more essential when you own multiple credit cards.

Review credit score

When you own multiple credit cards, the outstanding balance on each card will be compounded interest, impacting your credit score negatively. Therefore, it is advised to check your credit score thoroughly to ensure access to credit in the future.

Set alerts

One way to manage multiple credit cards is to set alerts on your phone to be notified about every action on your card. These alerts will let you know about each expense made, the due date of bill payments, or any transaction that goes beyond the credit limit.

Auto-payments

One crucial factor to keep in mind as a credit card holder is paying bills on time. By setting up an automatic payment feature from your bank account, you can pay bills before the due date without the hassle of manually doing it. This feature also helps you choose a limit up to which you can pay every month. It could be a minimum amount, a full balance or a fixed amount every month according to your capacity.

Rewards and benefits

One key way to get the maximum benefits from your credit cards is to fully use rewards and benefits. Be well aware of the benefits that each card offers and strategies to get the most out of each card. However, make sure not to overspend or go beyond your budget only to use benefits and rewards on your card, as every expense made on your card has to be paid in future. Overspending can compromise your finances.

In conclusion, having multiple credit cards can be challenging. Ideally, you must plan your finances on each of the credit cards you own. If you have many credit cards, it will be a smart choice to split your monthly expenses strategically between several credit cards to avoid hurting your finances.

(Note: Using a credit card carries its own set of risks)