As we all know there are many credit card options available in the market which offers great benefits and card offers. It is really hard to turn down the opportunity when an executive calls with a fresh credit card option with great offers and benefits and you also think how hard can it be? To maintain all your credit cards. But did you ever gave a thought on how many cards can you actually manage to achieve a great score? Or too many cards are bad for your credit health?
The answer to this is no number is right. You can use multiple cards and maintain a good score and also use one card and see your credit score go for a toss. It’s not the number of credit cards you hold but it’s how you use them. If we determine the possibility for a great cibil score two credit cards would be enough in which you won’t be spending much and also will have room to pay your monthly dues on time. If a person wants to go for multiple credit cards, they definitely can but that depends from person to person and their credit histories.
How much you spend and how much you repay the credit card dues will directly impact your Cibil score. You will have to make sure that even if you have a single card it should not impact your credit score which will cause problems when you make any future financial transactions.
Here is how you can manage your multiple credit cards without damaging your credit worthiness,
Don’t just get any card
Are you that person who says yes to every credit card sale call? Don’t. Choose your card wisely; there are a lot of options available in the market with great offers and cash backs which will be helpful for you. There are many websites where you can compare different cards and opt for the same. Even if you are making a decision of getting the card from the call center executive try to gather as many information on the card and if possible ask for a leaflet of card and its features over your mail. This way you can either limit your number of cards or have exclusive cards with you.
Use your card at the right place at the right time
People have the habit of overspending when they have a credit card. Some cards offer great reward points on your monthly spends and some of us just swipe left and right in the greed of such points, what we do not realize is that we will have to pay the due at some particular point and if you do not pay your dues on time, you will be facing a lot of issues including your cibil score going down. If possible try spending on your debit card or pay by cash. Do not fall for fancy reward points and overspend your card limit.
Do not close any old credit cards
Some people think I have paid all my dues on time and I do not need this credit card anymore and try to close the credit account. What you are eventually doing is hampering your credit score, yes you saw it right, and closing an old account will only result to a bad cibil score. Instead you can use the card for small transactions and pay the dues on time as we all know there is a minimum amount which is needed to be spent to avoid the annual fees.
Redeem your rewards
Award points are always tricky, if you do not use your reward points to avail benefits the award points starts expiring and a portion of your reward points expires every month. Well the point expiration and gaining depends on which card you have, so try redeeming your points from time to time.
There is nothing wrong with using a lot of credit cards, but you will have to make sure you are not carried away with the spending addiction and end up in huge debts. Your card can be your friend in your good times but it can also turn into a curse if not used wisely.