Have multiple credit cards? Reason to worry? Forget that, check these 5 benefits

Credit cards have become a great tool of spending flexibility and rewards for customers, especially if they have multiple cards in their wallet. Multiple cards provide the cardholder access to a higher credit limit and enables access to more perks and benefits.

Further, having multiple credit cards also helps in building your credit history and a good credit score through timely payments. But multiple cards can be rewarding, only if used cautiously and judiciously.
Moreover, having access to more credit can also tempt the user to overspend, which will just add to the unnecessary debt burden.

Following are some tips to leverage maximum benefit from holding multiple cards:
1. Do not use the entire available credit limit but restrict your spend to only about 30% of your credit limit from each card. This shows that you’re not overly dependent on credit and improves your chances of getting loans in the future at favourable terms.

2. Every credit card comes with its own set of rewards, deals, and discounts and most credit card companies give the user an option of choosing which segments (such as fuel, dining out, travel, etc) they want maximum rewards for. Certain cards have higher rewards for certain kind of purchases and services. Some even offer free benefits such as unlimited golf games and free airport lounge access. So choose your cards and rewards wisely in order to get maximum mileage out of them. Cards with lower rate of interest are attractive if one wants to avail credit on cards and not use them for spending purposes

3. You also need to be smart in choosing the right card for every transaction. For instance, a card meant to give huge points and cashbacks should be used for shopping, the one with high credit limit can be used for large value purchases and one with low interest rate can be used to avail credit on your card.

4. You can stagger the repayment for your purchases. For instance, if you are a little short of funds in a particular month, you can make a necessary purchase on a card whose billing cycle has just begun. This will allow you to make the payment for that purchase in the next month when you might have more liquidity.

5. While using multiple cards, even a small oversight or delay in payment can reduce your credit score.

By, Gaurav Gupta
(The writer is co-founder and CEO, MyLoanCare.in)

The article was published in DNA as 'Alternate between credit cards smartly'