Feature Image


Posted on Monday August 13th, 2018

1. Credit Cards are largely misunderstood. The card that you carry and use, is merely a credit based negotiation tool.

2. There are many dogmas, assumptions and theories floating around the internet and even some businesses.

3. Only the banking institutions, some big law firms and the credit reporting agencies really know how credit really works.

That being said, I’ve picked the brains of banks and legal professionals regarding their opinions on credit cards and it’s many assumptions by the public.
Having Multiple Credit Cards” can be good or bad, depending on it’s use and % of utilization.
A high ranking banking official explained that if you want to have a strong leveraging tool of credit, you should utilize no more than 2% every month on your cards for two or more years.
If you can’t afford to live off your income and cash, credit is really not for you. People in the top tier of credit do not truly need credit for long term goals, it’s simply a leveraging tool to not use their own money for much of anything in the startup stages.
No matter how many cards you carry, if you use them all the time, for just about everything, in an attempt to get “points” and other rewards by “spending” the credits, you either don’t need any credit or misinformed. Spending should be at a very minimal when it comes to credit cards.

Multiple credit cards offer cyclic benefits:

• All merchants don’t accept all cards. Some may either accept Visa or MasterCard and in such a scenario, you might find yourself inconvenienced by holding only one card of either type.
• You can keep one card exclusively for online transactions. That way you have limited your fraud risk to just a single set of card details. Such a card should have a minimum spending limit because if the details are hacked, your exposure to theft will be minimal.
• If you have a card which offers a good deal or generous points for petrol purchases or for airmiles, then you might like to use that card only for that particular purpose. Frequent fliers may like to keep one card for accumulating air miles and use another card which offers a decent cash back program. Rarely, will you find a single card with both offers.
• You might find yourself eligible for different loyalty programs, gifts, discount schemes and bonuses on different cards.
• Multiple credit cards also allow you build a great credit rapport which can prove advantageous if you ever plan to opt for bigger loans in need.

So its preferred to check your needs before you opt for mode of payment . Shorter payment or longer EMI repayment both can be accessed through credit cards but your ideology to use it precisely shall impact your spending and usage henceforth . Idea is not to get trapped by the multiple credit facility on various cards but to optimize the different features of the card onvarious spending .