Benefits of Multiple Credit Cards

Variety is the spice of life and having multiple credit cards can help “feed the flavor” in several ways. According to Merilyn Lewis of MSN Money (Feb, 2007), about 1 in 7 Americans hold 10 credit cards, while a staggering 51% of the population has more than two credit cards in total. With so many credit card accounts, managing multiple credit cards may seem intimidating; however, the benefits you can get from having a fist full of cards is well worth the extra time needed to manage all your accounts.

There are a variety of reasons to having multiple credit cards. Some benefits of having multiple credit cards include:

  • Not all credit cards are accepted by all merchants – Imagine going on a first date, enjoying a delicious meal and whipping out your American Express only to have the waiter point to a sign that says “we only except MasterCard or Visa.
  • Financial Safety – By using one credit card solely for online purchases, you can help mitigate possible fraud by limiting your information to a single set of card details.
  • Rewards, perks and incentives – With a multitude of credit cards offering gift certificates, free travel or discounted gas you may feel like you are winning free prizes for your spending habits.
  • Increasing your credit score – The most important factor for raising your credit rating is your credit utilization ratio and by managing a multitude of cards properly you can maintain a healthy proportion of available credit to your active debt.
  • Staggered bill paying – By having an assortment of credit cards for use at your disposal you can stagger the use and the pay schedules to coincide with events such as monthly or weekly pay checks.
  • Easier bookkeeping and budget management – Those who either have to travel for business or are self employed can truly appreciate keeping work expenses separate from their personal expenses, especially when it is tax time.
  • Leverage – If credit card A sends you a letter saying a rate increase is in your future, you can always rely on credit card B instead.

Despite the benefits of having multiple credit cards – it is only beneficial if you are aware of your financial situation and know how to manage the bill payments for all your credit cards; otherwise it can be more harmful than beneficial. So many of the above situations will not be viable if you do not pay your bills on time and handle your credit responsibly.