Last week, Covid-19 restrictions in the UK saw a decline. As a result, credit card spending on travel, leisure and consumer goods is set to rise. Using a credit card to fund your spree is a great way to receive rewards, but how many credit cards should you have? Here’s why you might want to consider owning more than one!
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What are the benefits of more than one credit card?
If you plan on splashing out to celebrate the easing of lockdown restrictions, you may want to consider owning more than one credit card. While having more than one card undoubtedly comes with some risks, multiple credit cards can provide a number of benefits that you wouldn’t get from using just a single card. Here are three key benefits to consider.
1. Rewards when you travel
As well as a regular credit card, keen travellers should consider applying for a travel credit card. These credit cards are designed to help holidaymakers save money when spending overseas, booking flights or staying in hotels.
Travel credit cards offer unique rewards that can be hugely beneficial if you plan on booking a holiday anytime soon. Unlike most credit cards, travel credit cards don’t charge you a fee for making purchases overseas, and they often offer better exchange rates.
While travel credit cards have few benefits when used in the UK, it may be worth applying for one to use on your next holiday abroad.
Air Miles credit cards are another popular option for travellers. These credit cards are typically provided in partnership with airlines. They reward you with points and discounts that can get you money off your next break.
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2. 0% interest periods
Another benefit of owning more than one credit card is that you may be able to extend your interest-free purchase periods. Interest-free periods typically occur after you have paid off your monthly bill in full. These periods usually last for a few days. However, if you own more than one credit card, you will be able to benefit from multiple interest-free periods.
Therefore, if you time your monthly bill payments correctly, your interest-free periods could cover the entire month. This is a great way to avoid accumulating large amounts of interest on your monthly bills. Just be sure to remember which card is currently interest free, and make sure you pay them off at the right times!
3. A better credit score
In some cases, owning multiple credit cards can improve your overall credit score. This is because credit cards come with their own credit limit and the percentage of this limit that you use contributes towards your score.
If you own multiple credit cards, you will have access to a larger total limit. This makes it easier to keep the percentage of the limit that you use low for each card. For example, it could be better to spend 25% of your limit on two cards than to spend 50% of your limit on one.
However, a large limit also comes with the risk of spending more than you can afford to pay back. Always pay your bills on time and keep track of what you’ve spent on each card.
How many credit cards should you have?
Owning multiple credit cards can offer some great benefits. Nevertheless, the number of cards that you should own depends on your ability to manage credit. If you have a great track record for paying your bills on time and only using a small percentage of your limit, you could benefit from owning another type of card.
However, increasing the number of cards you own puts you at more risk of accumulating debt. Therefore, if you have a bad credit history or cannot afford to pay any more debt, it may be worth sticking to just one.
If you do decide to invest in another credit card for your post-restrictions spending, try opting for a rewards credit card that offers different benefits to the card you already own. This is the best way to make the most of using more than one card.
